A New Analytic Framework on Mainstream Economic System in Complex Reality

China Economist - - Articles - Yu Jing ( ) and Wang Tao ( ) Institute of Industrial Economics (IIE), Chinese Academy of Social Sciences (CASS), Beijing, China * Corresponding author: Yu Jing, No. 2, Yuetanbeixiaojie, Fuwai, Xicheng District, Beijing, China ( 100836). Email: jean_ yu@2

Abstract:

This paper discusses the transformative effects of demographics, technology and organization on the socio-economic activity of today’s world, examines the limitations of mainstream economic system, and elaborates the challenges of economic polarization and the complex and diverse reality to mainstream economic system. This paper argues that in the 21st century, economic institutional analysis needs to shift towards a crossdimensional approach, mixed organizations of multi-institutional logic and poly-centric governance system.

Keywords:

余菁

economic system, cross-dimensional, multi-institutional logic, poly-centric

approach

JEL Classification Code: E02, C38, D02

1. Introduction

All social activities take place under a specific economic system of publicly acceptable rules and norms ( Scott, 2014). Economic systems will influence social operation at all levels and evolve with the times rather than stay in a static form ( Greenwood, Suddaby & Hinings, 2002). With the sophistication of social activities, their underlying inherent economic systems will reach their limits and become increasingly impotent and obsolete in the face of new challenges. At this moment, new paths and methods must be explored to push forward reforms to meet new needs ( Smets, Morris & Greenwood, 2012).

Given the complex and diverse economic reality, it is essential to create a brand- new institutional analytical framework to develop solutions for economic systems of the 21st century. Through the lens of institutional analysis, this paper reveals how the mainstream 王涛 economic system failed to keep pace with the reality of rising economic divide, complexity and diversity, creates an analytical framework for inducing the transformation of economic system based on frontier studies, and proposes that effective solutions can be found in complex economic environments by following a multidimensional, multi-institutional and polycentric approach.

2. Transition of Economic System from the 20th to 21st Century

What are implied by the change of times from the 20th to 21st century? What are the factors

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