Book provides clue to institutional reform

The financial crisis on Wall Street once again rings the alarm bell that there is no such a thing as laissez-faire being able to give full play to economic growth without any negative effect. The repeated back and forth of regulation and deregulation by governments in the Western world, the United States in particular, reveals the intrinsic problem between markets, institutions and individuals. For such a late-comer as China in terms of market economy, more attention to the relationship between the three elements is more than necessary to preempt pitfalls that the malfunctioning of its social institutions may quite probably cause to its healthy economic growth.

The Chinese translation of Professor C. Mantzavinos' Individuals, Institutions, and Markets published early this year could be a good reading for theoretical analysis of the relationship between the three elements from the perspective of political economy although the book was first published in 2001.

Despite its cross-disciplinary theoretical analysis of how social institutions affect economic outcomes, it may remind us of our lack of enough concern for the timely reform of social institutions that may potentially turn out to be stumbling blocks to the long-term development of our economy.