The Institutional Change Analysis Of Shanxi Vote Banks' Development And Decline

Shanxi Vote Banks was China's first financial organization which did in the remote and exchange between different regions. During the five hundred years' history of Jin Businessmen, the Vote Banks was the symbol of its peak time, especially after the middle of Qing Dynasty it became the leader of China's finance. The causes of the emergence, development and decline of the Shanxi Vote Banks were paid much attention to by the scholars, and provided lessons and experience of management and operation to modern enterprises. This paper will base on the predecessors' analysis, and use the theory of Institutional Change Theory of New Institutional Economics to analyze the emergence and decline of Shanxi Vote Banks.The paper firstly analyzes the general logical framework of institution transformation. The paper thinks the Economic entities are in a group, which shares the same faith. The sharing faith is the initial conditions of institutional transformation, because it affects the value choice of economic entities, and guides and regulates people's behavior, and thus affects people's evaluation of the consequences of the transformation. In Chinese traditional society, the long-term effects of the Confucian thinking made the Shanxi Vote Banks have their particular beliefs, such as the integrity based on ethical relations, the emphasized authority, and strong social class tendency. Those beliefs restricted and limited in the scope of institution transformation. Und er the influence of the sharing faith, if the prestige becomes unbalanced in the trust radius, that is to say, the supply and demand of trust areinconsistent, the system should be transformed——this is also the basic reason of theinstitution transformation. In the earlier period of the Shanxi Vote Banks development, it used the prestige balance way which matched Chinese traditional society which was based on "moral" "trust", so that it developed quickly. In later period, because of the political turbulent, competition from foreign banks, the prestige balance way based on "the morals" was no longer adapted to the new conditions. The Vote Bank institution should be transformed. But the occurrence of the institution transformation should satisfy not only the essential condition, but also some sufficient conditions, which includes support of political authorities and the social environment permission. In the later period of Qing Dynasty, the competitor of the Vote Bank - - officer's camp banks and the Foreign banks expands gradually in finance market influence, and the Vote Banks were hardly contends with them, therefore its transformation met with difficulties. Besides, the bureaucrat social class refused to pay the transformation cost in order to protect personal benefits. As a result, the institution transformation failed and the Vote Banks gradually moved towards declining.This article carried on different explanations to the predecessor's viewpoint by the analysis of Vote Bank institution transformation. The paper thinks although the decline of the Vote Banks was related to Qing government's collapse, the latter was not the basic reason for the Vote Banks' decline, it was just a performance factor which showed the prestige balanced way was not suitable for the system environment then. Similarly, the infinite responsibility system was the important reason for not only Vote Banks' decline but also its prosperous because it played different role in different periods and different social environment in Shanxi Vote Banks' institution transformation. Therefore it can't be generally spoken as the infinite responsibility system did the idle work to the Vote Banks' development.Unifying Chinese present condition of finance market and management and operation of modern enterprise, this article thought that the Enterprise must extend their trust radius promptly along with the economical development and social change, and establish new prestige balance way. Besides, we need continue to establish one kind of integrity system in order to compensate the present credit flaw condition. However, we also should prevent against "the moral absolution". In addition, the enterprise spontaneous transformation usually miss the best transforming time, the government have the necessity to supply reasonable compulsory transformation in some appropriate opportunities.