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Weisen:Remarks at the 3rd Great Minds China Forum

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The whole China has come to a crossroad to decide what course to follow next. China is currently on the eve of a great transition, and what should we, as institutional economists, or even the whole economic circle do in this era? What is the overall requirement for all colleagues studying Chinese institutional economics or the whole Chinese economics? Here I would like to make three calls instead of giving a speech:

 

(1) We have studied the ways and the content of institutional changes, and the question now is not to study why the institution changes, but how the institution changes. What is the boundary between the market and the business? How to deal with the market and firm design based on the abstract theories? Is the system designed or evolved? The list goes on. For our Chinese economists, we should focus more on the specific property right system and legal system that are more suitable for the operation of the market economy. The study topics also include the legal system of property rights, the fiscal and taxation system, the government budget system, the current property law, the property rights of real estate and the property right system, the relationship between China's land system and the market economy, etc.

 

(2) We have studied the institutional changes from the small scale to the large scale, and we need to figure out the basic institutional arrangement for the market economy to run. What is the basic national system for this? What is its relationship with the operation of the market and the economic development? The focus of the study is the conditions for well-ordered market economy operation and institutional foundation (which requires more communication and exchanges between our institutional economists and the political philosophical circle and the jurisprudential circle), and we should pay special attention to the relationship between economic theories, such as classical political theory, social choice theory, rule of law, democracy, etc. and economic development. In this respect, the three division methods for the human society put forward by Professor North, Professor Weingast and Professor John Wallis are all very good references.

 

(3) I recently went to Germany and visited Fraunhofer

Institute and Hannover Robot Institute, from which I could tell that the German government is both an “effective government" and a "limited government". Professor Lin Yifu put forward the framework of his new structural economics, proposing to form an “effective government”. Professor Tian Guoqiang put forward to establish a “limited government” while talking to Yifu and Wang Yong, one of my students. Here I think it is a matter of government system. While creating the preface for Wang Yong’s work, Reflections and Debates on New Structural Economics, I asked a fundamental question to Wang Yong, and also Yifu: what kind of government system will be an “effective government” in your new structural economics? Historically, on the one hand, back in the 13th century with John, King of England and his Magna Carta, there was no concept of “effective government” and “limited government” yet; on the other hand, during the reign of Louis XIV and the era of Richelieu and Colbert, was the French government an “effective government”? And how about Hitler's Nazi system? Why do we think that the current Merkel’s government is both a limited government and an effective government? And in the 21st century of globalization, what kind of national system and government system should we establish in China? Are scholars engaging in comparative institutional analysis, like us, needed for further thinking and study?

 

Of course, institutional studies in such a wide scope may not be published, or no publishing houses would be willing to do that, but are we, economists as a whole, clear about the future roadmap of the Chinese economy? In the current and future social transformation, are Chinese economists ready for adopting an appropriate economic and political system for Chinese economy?

 






◆please indicate the source if authorized: National Economics Foundation

◆photo:National Economics Foundation