Ideology and Institutional Transformation

As an informal institution, ideology can reduce transaction costs and stimulate economic growth during economic development. In the institutional transformation, ideology helps to promote mutual transformation and development of formal and informal institutions. The achievements of Chinese economic growth and institutional transformation owe to ideological construction of the development outlook centered on economic growth and it is because of ideology that local governments are inspired to make institutional innovations constantly and push economic development. To face the reform and development in the future, it will be an effective policy to reinforce the ideological authority.