Coase and China

 2010  12 29 is an economist Ronald Coase (Ronald Coase), Professor 100th birthday. This morning, held in Beijing, China economist,

Professor Coase home in Chicago, attended the meeting via Web video and delivered a warm speech. Although the meeting was 28 when the evening Chicago time, but London is already 29 midnight. For Coase was born in the outskirts of London is concerned, this event held in China, the day before it must be his first blessing.

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Professor Coase of Chicago Law School, teaching a long time, not an economic professor. However, he is the last century one of the most important economists. He won the Nobel Prize in Economics in 1991. His two papers, one was in 1937 at the age of 27, he published epoch-making impact. His name forever with the

is worth noting that since his last century academic thought has been introduced to China 80 years later, scholars of the Chinese economy seems greater than on the West. Perhaps because his paper did not use mathematics, easy to understand. Perhaps because of his theory is based on visual observation, people easily accept.

However, in my opinion, the Coase great influence in China, there are two fundamental reasons: First, the depth of his economic ideas; the second is his concern with the challenges facing China's economic reform is directly related to sex. This combination may explain why economists Coase's theory of the Chinese soft spot.

First of all, most modern economists, the study focused on the market in resource allocation, and Coase's studies beyond this range. Coase theory is the study of rights (rights) and power (authority) of the configuration issues, including the issue of property rights. The configuration of rights and powers are often the factors behind the allocation of resources and conditions, therefore, rights and powers of the configuration issues for a country like China from a centrally planned economy toward a market economy is the economy, the problem of resource allocation than the more simple as the basic, more important.

This is because the issue of allocation of resources to clear property rights and sound more than the premise of the rule of law, and this is precisely the premise of the original does not exist in China, need to reform the establishment. Therefore, we discuss the problem of transition in China to discuss China's development, get rid of the rights and powers are not open to re-configuration. Coase's theory for our research provides the basic analytical framework.

Second, Coase and created a new institutional economics and new institutional economics is different from the . Analytical, is the doctrine which has assumed that there was reasoning, a proposition, there are tests. The analysis of a core gripper, is transaction costs. Transaction costs are observable, measurable. Transaction costs is not limited to market transaction costs, including transaction costs of the organization, sometimes referred to as organizational costs.

With transaction costs, the entry point, when we study the regime, not only describes the phenomenon and investigate the concept and theoretical reasoning on the empirical test. New Institutional Economics Institutional Economics inherited the old concern of the system, but its impact is far more than the latter, because it is the analysis, rather than simply describe the system.

Because of this, it is the power of the theory, both the explanatory power, but also predictive. This study of China's economic problems, in particular, very significant problem is the system, it guides us out of the concept from concept to research methods, focusing on reasoning derived by the proposition can be tested, go to collect empirical evidence to test these propositions. This is a scientific method of system issue.

Third, the new classical economics to study the market allocation mechanism, to focus on trading activities on the market and price mechanism, this put the company in the market as a production function and the simplified a profit maximization assumption. Therefore, we focused on understanding the market price. But the Coase theory gives us knowledge of the market system on the market beyond the mere knowledge of trading and market prices.

view of Kos, market transactions, internal transactions, or even government regulation of the market is different form of contract or organization, which won the competition and efficiency in accordance with the principles of the decision. This brings us to the market system as a whole has a higher level of understanding. This transition economies like China is very important. Because the transition itself is redefining the enterprise market, government and enterprise, between government and the market. Coase's theory to our analysis of institutional transformation, when standing at a new height.

After 30 years of reform, opening up and development, China's economy has shrunk. However, the institutional transition of China's economy is still a long way to go. Coase's theory of transformation of the Chinese system we think has a fundamental significance. His theory is right (including property rights) and the disposition of power, based on transaction cost analysis as the starting point of the study, at the same time provides us with knowledge of the market economy, a holistic framework.

This is why Coase's theory of development like China, countries in transition have such a tremendous impact on the underlying causes. It is precisely because I believe he thought in China, not only in the early stages of reform, but also in the present and future, there will be a great vitality.

of the Dean of the School of Economics and Management of Tsinghua University, Professor