Research On Informal Constraints And Reforms Of Industry And Business Institution In Late Qing Dynasty

The government of Late Qing Dynasty made a series of economic reforms from 1903 to overcome crisis. The mainly program was transplanting the institution of industry and business of the Western World including Japan. However, judging from the result, the revolution can't be a success. Some researchers explained this historical phenomenon focused on government and rules through textual research. We referred to existing researches and the theory of institutional change proposed by Professor Douglass. C. North. We tried to give this historical phenomenon a new explain through informal constraints theory with the custom of incomplete private property rights and the notion of anti-private permeated in ancient and modern society of China. Furthermore, we get some lessons for our times.This article intends to explain the failure of the revolution through a logical process. The start is the continuity of informal constraints, and we tried to explain the continuity by rigidity of ideology. Consequently is contradiction between informal constraints and introduced formal constraints, and we tried to analyze the contradiction by the function of informal constraints. And then, incentive function of formal constraints performed imperfectly because of the contradiction. We presented the behavior of the merchants under the custom of incomplete private property rights and the notion of anti-private. In addition, we analyze the behavior of the merchants by the incentive function of property rights. Finally, because the incentive function of the formal constraints performed imperfectly and the high transaction costs brought by the rigidity of ideology, the efficiency of the institutional implement was quite low.This paper has many limits. First, there are many reasons of the failure of the revolution, including the flaw of the formal constraints and interference of imperialism, and so on. Undoubtedly, informal constraints are one of those reasons, but we can't exactly estimate the correlation between informal constraints and the failure of the revolution because of the character of informal constraints. Second,there was a fierce collision between traditional thoughts and introduced thoughts in modern China. Some ideologists of that time took the ethos for collectivism, in contrary; others took for individualism, so we have to make a further probe.