A Comparative Study Of Inclusive Institutions And Extractive Institutions

Institutions are the determinants of economic growth.If there is no appropriate institutional arrangements,there will be no meaningful market economy.Without any increase in input factors,only if the conditions for innovation can generate economic growth.Among them,an effective institution is a key factor in economic growth,which is conducive to less transaction costs,reducing the difference between personal income and social benefits,encouraging individuals and organizations engaged in productive activities,and ultimately achieves economic growth.Foreign scholars Acemoglu and Robinson's book called "Why Nations Fail?The Origins of Power,Prosperity,and Poverty" which proposed a theory analysis framework on inclusive institutions and extractive institutions,under extractive institution,economic growth is possible,but can not be sustained,only under inclusive institutions,long-term economic growth will be able to be achieved.This theoretical perspective in line with some historical reality,however,there are some flaws.It ignored the institutions running and maintenance.Overall,their theoretical framework for our country in the implementation of political and economic reform have some reference and practical significance.This paper attempts to analysis inclusive institutions and extractive institutions,analysis its formation,evolution logic,and it's economic performance,as well as an inclusive institutions,operation and maintenance.Main details:First,introducing the theory origin of inclusive institutions and extractive institutions,defining the inclusive institutions and extractive institutions,indicating a distinction on inclusive institutions and extractive institutions and their basic features.Second,analysis the mechanism of inclusive institutions,human capital and economic growth,and the mode of inclusive institutions,human capital and economic growth,and the inclusive institutions is conducive to economic growth.Similarly,the extractive institutions is conducive to rent-seeking,through China and India as a case study we compared two relations institutions and economic growth,which is not conducive to the theoretical logic of economic growth,this indicating that inclusive institutions is not conducive to economic growth.There should be some problems with Acemoglu and Robinson's so-called inclusive institutions in the actual operation.Third,analysis the overall interests of the Group in order to undermine social interest groups,resulting in a rigid system,and gradually evolved into an extractive institutions.Extractive institutions under certain conditions,will translate into inclusive institutions.Finally,discusses the basic content of the main conditions to build an inclusive institutions,as well as the suitability and maintenance of an inclusive institutions,and the possible future path of reform,China is likely to be able to embark on the path of sustainable growth and this paper will provide some instructive suggestions.