Andrew Sheng and Xiao Geng write: Nobel laureate economist Douglass North applied economic theory to history to gain insight into institutional and social change. \u00a0His theoretical framework could prove invaluable to China\u2019s leaders as they navigate the next phase of institutional change.<\/p>\n
North identified three lessons that policymakers should draw from his research.<\/p>\n
First, what determines economic performance is the mix of \u201cformal rules, informal norms, and enforcement characteristics.\u201d Second, polities have a major impact on economic performance, because they \u201cdefine and enforce the economic rules.\u201d And, finally, adaptive efficiency (how the rules are changed), not allocative efficiency (the most effective rules right now), is the key to long-term growth. \u00a0China’s Institutional Change<\/a><\/strong><\/p>\n \u00a0 Andrew Sheng and Xiao Geng write: Nobel laureate economist Douglass North applied economic theory to history to gain insight into institutional and social change. \u00a0His theoretical framework could prove invaluable to China\u2019s leaders as they navigate the next phase of … Continue reading ![\"China's](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/12\/Chinas-Reform-300x194.jpg\")
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