First, the institutional interpretation of rural financial development
The development of rural finance is not only the extension of financial development in rural financial field, but also the embodiment of economic development in rural financial field. However, simply defining "rural financial development" as "rural financial development" or "rural financial development" does not help to deeply understand its essential meaning. It is found that, like the definition of rural finance, China has both rural financial development and Raymond. W goldsmith's simple definition of rural financial development [ii]. Undoubtedly, Raymond's methodological significance. W. Goldsmith's paradigm is extremely profound, but at the same time, this study also notes that this definition focuses on the quantitative aspects of financial development, which is based on the external expression of "financial development" in traditional development economics theory [iii], and does not really reveal the institutional factors behind financial development, which is different from von Mises and Heck's "development is the expansion of division of labor and exchange" and Douglas's point of view. C. north's. " Therefore, to a certain extent, it is only "rural financial development" in the sense of "growth".
To grasp the connotation of "rural financial development", we should not only grasp its "quantity" aspect with the help of Raymond. W. Goldsmith's paradigm, and "financial development should try to explain how the financial mechanism and financial system change in general, and the financial structure should include the financial system, financial transaction mode or transaction mechanism". Therefore, we should also grasp its "quality" from the perspective of transaction and go deep into the institutional level. On the basis of defining the concept of "rural finance", this paper further believes that "rural financial development" is the expansion of rural financial transactions. The expansion of rural financial transactions is not only manifested in the expansion of trading volume, trading scope or space, the continuous innovation of trading means-rural financial instruments, but also in the choice of rural financial transaction subjects after weighing "scale gains" and risk losses. When the benefits of rural financial transactions through "economies of scale" are greater than the sum of transaction risk losses and transaction costs used to reduce uncertainty and transaction risks, that is, when the net benefits of rural financial transactions are positive, rural financial transactions will expand. In other words, the development of rural finance is based on the existence of net income of scale. When the net income of rural financial transactions is zero, the development of rural finance stagnates. Therefore, "scale economy" is the driving force of rural financial development, and risk loss and transaction cost are the fundamental limitations of rural financial development. The key to promote the development of rural finance lies in improving the benefits of "economies of scale" and reducing risk losses and transaction costs.
Every expansion of rural financial transactions increases the degree of information asymmetry, uncertainty or risk of transactions between the two parties, making it difficult to confirm and guarantee the "trust" of transactions, increasing the difficulty in judging the risks and benefits of rural financial transactions and increasing the cost of rural financial transactions. In order to reduce transaction costs, the trust relationship in rural financial transactions has developed from both sides to trust in rural financial instruments, thus promoting the continuous innovation of rural financial instruments. To judge the rationality and risks of emerging rural financial instruments, it is necessary to rely on "experts" with specialized knowledge and ability-rural financial intermediaries to provide services. In this way, the trust in rural financial instruments is transformed into the trust in the reputation and professional knowledge and ability of rural financial intermediaries-"experts", and the principal-agent relationship in rural financial transactions is produced. The higher the trust, the higher the principal-agent efficiency, the lower the transaction cost, and the better the "scale benefit" of rural finance. The net income of rural finance scale further promotes the development and expansion of rural financial transactions. In order to maintain this development and expansion, it is necessary to supervise and strengthen the trust relationship in the principal-agent relationship. This kind of supervision is nothing more than self-supervision, two-way supervision and third-party supervision. In this way, rural financial supervision and the corresponding rules-rural financial system and specialized rural financial supervision institutions that implement this system came into being. Rural finance has developed from an initial rural financial activity to a modern rural financial system-a system of fund concentration, flow, distribution and redistribution that relies on the system to enhance trust, promote the continuous expansion of rural financial transactions, and pursue the maximization of scale net income.
By analyzing the development process of rural finance, we can find that the development of rural finance is from "particularism credit" [iv] to "universalism credit" [v]. The existence of scale economy in the real economy and the pursuit of scale economy by economic subjects are the premise of rural financial development. Information, trust based on information, credit generated by trust and reputation formed by continuous credit are the basis of rural financial development, which can reduce the uncertainty of rural financial transactions and reduce the risks and risks of rural financial transactions.
Similarly, on the basis of grasping the institutional attributes of "rural financial development", we must also combine the functions, characteristics and external environment of rural finance to understand "rural financial development" in the sense of functional paradigm. (1) The goal of rural financial development is to promote rural economic development. Finance is an important way to promote capital formation, and rural financial development is the key to rural economic development. The development of rural finance is to improve the production and living conditions of agricultural producers by reducing their borrowing costs and providing sufficient funds; Stimulate the development of agricultural production by providing financial support for the use of modern technology in agricultural production; By dispersing the natural risks and market risks existing in the process of production and operation, the predictability of rural economic activities can be improved and the rural economic development can be promoted. (2) The development of rural finance must keep pace with the development of rural economy. The development of rural finance in developing countries, especially in China, mainly faces a large number of small farmers and small and medium-sized enterprises scattered in rural areas. Not only is the transaction small and frequent, but it is also difficult to obtain the information necessary to establish credit. Moreover, the cultural quality of farmers and the seasonality of agricultural production also require simple, flexible and timely financial services. In addition, the rural economy, especially agricultural investment, has the characteristics of long investment cycle, low income, instability, coexistence of natural risks and market risks, and low comparative income. The transaction cost, capital use cost and transaction risk of rural finance are high, while the income is relatively low. Modern and organized formal commercial finance is not only unwilling to set foot in the rural financial market, but also an effective system and method to avoid risks formed in the process of pursuing economies of scale, which also hinders or even prohibits rural financial transactions. Therefore, the development of rural finance is not reflected in the modernization of financial institutions, tools and systems, but in its adaptability to rural economy. (3) The development of rural finance must be based on the effectiveness of government actions. Due to the insufficient supply of formal finance and the high cost of informal finance, rural financial demand is often difficult to meet, the self-expansion motivation of rural financial transactions is insufficient, and the market mechanism of rural financial development fails. Without government intervention, rural economic development and rural financial development will be in a low-level equilibrium state, and then enter a vicious circle of mutual inhibition. Therefore, the government must intervene in the development of rural finance to make it go beyond the general connotation of "financial transaction expansion". Undoubtedly, government intervention is very effective for the early rural financial development, especially for the reconstruction and rapid development of rural financial organizations. However, the internal logic of financial development and the government's "limited rationality" and "invisible feet" will inevitably lead to government intervention in financial development. Under the condition that the requirements of economic development for financial development are constantly improving and the macroeconomic environment is more complicated, there will be excessive intervention, which will further hinder the development of rural finance and make the development of rural finance stagnate due to the lack of an effective market system. Therefore, the development of rural finance must be based on the effectiveness of government actions. (4) The development of rural finance is influenced and impacted by the macro-institutional environment. Although "rural financial development" has its own logic, it cannot go beyond the economic development strategy and corresponding institutional arrangements. Economic development strategy and its institutional arrangement depend on economic development goals, resource endowments and external environment. In the early stage of industrialization, the funds needed for industrialization can only come from the rural economy with agriculture and farmers as the main body, and the development of rural finance must obey the industrialization strategy. The difference between planned economy and market economy is only a means. The former is a compulsory process for the state to control finance, while the latter is a spontaneous market process characterized by financial liberalization. In this sense, the development of rural finance in the process of industrialization is exogenous to the development of rural economy. However, economic development fundamentally depends on rural economic development, especially agricultural development, and the above process of rural financial development is unsustainable. The development of rural finance must ensure the development of agriculture and rural economy needed by economic development. In this way, the rural finance born in the rural economy must exist objectively, and the "dual financial structure" becomes very natural. The development of rural formal finance endogenous to industrialization strategy is inconsistent with the development goal of rural economy, and it will constantly require the government to curb endogenous informal finance in rural economy, so that while urban and rural finance presents a "dual" structure, rural formal finance and informal finance also present a "dual" feature. In addition, the government's cautious attitude towards financial development and the influence of external financial development consequences also affect rural financial development through the government's financial system arrangement. The development strategy of heavy industry and urban tilt after the founding of New China, and the pace of industrialization and urbanization under the market economy system, especially the realistic performance of the government in rural financial development after the Southeast Asian financial crisis, are the best examples to understand the connotation of "rural financial development".
[i] Development economics believes that economic development refers to economic growth accompanied by all-round changes in economic, social structure and political system, which not only means an increase in output, but also means changes in output and income structure and changes in political, cultural and other institutional factors that accompany the increase in output. According to the new institutional economics, "in the past, the research on the causes of economic development focused on capital accumulation, technological progress, specialization and division of labor. These factors are not so much the causes of economic growth as the economic growth itself." The fundamental reason of economic growth is institutional change, and an effective property right system that can provide appropriate personal incentives is the decisive factor to promote economic growth "(Douglass C. North, 1990). Liberals such as von Mises and Heck of the Austrian school believe that economic development is the expansion of division of labor and exchange, that is, the expansion or evolution of the market system called "cooperative order" by Hayek. At present, "economic development" has given the connotation of "pursuing quality of life, sustainability, fair distribution and democratic participation". On this basis, the United Nations Development Programme put forward the concept of "human development".
[2] Raymond W Goldsmith (1969) divided financial phenomena into financial instruments, financial institutions and financial structures in Financial Structure and Financial Development. It is believed that financial structure is the synthesis of the form, nature and relative scale of financial instruments and financial institutions in a country, and financial development is the change of financial structure. To study financial development, we must study the financial structure and describe it as far as possible from the quantitative relationship, rather than being satisfied with the descriptive explanation of the relationship between finance and economy.
[iii] R.I. McKinnon and Edward S. Shaw (1973) are called Raymond. Goldsmith understood "financial development" as "financial growth". Peng Xingyun (2003: P 18 1) defines financial development as "a dynamic process in which financial functions are constantly improved and expanded, thus promoting financial efficiency and economic growth".
[iv] refers to credit based on personalized trust in a specific trader or counterparty. Because the premise of building trust-information is generally obtained through specific relationships such as consanguinity, consanguinity, love, geography, industry, etc., rural finance based on this credit usually only occurs in a specific narrow range, which can be mainly guaranteed by informal systems such as ethics.
[v] refers to the special relationship independent of the identity of the trader or the counterparty, and the credit generated based on the trust in the non-specific trader or counterparty. Because the premise of building trust-information, is generally obtained under the effective supervision, coercion and incentive constraints of external forces. Therefore, this kind of credit can usually occur in a large range, and its scope is subject to the effectiveness of external supervision, coercion and incentive constraints, and must be mainly guaranteed by formal systems such as laws, regulations and policies.
China Rural Finance Development Report (Rural Finance Development Research Group of China People's Bank, June 5438+ 10): China rural finance refers to various financial services such as deposits, loans, remittances, insurance, futures and securities. Including formal finance and informal finance, that is, private finance. Because rural financial services are mainly provided by formal finance (China People's Bank Rural Financial Services Research Group, 2008) and for the purpose of this paper, rural financial institutions in this paper refer to rural formal financial institutions, including banks, non-banks and other forms of financial institutions. Banking financial institutions mainly include policy-oriented agricultural development banks and their branches, branches or outlets of China Agricultural Bank, China Industrial and Commercial Bank, China Bank, China Construction Bank, Bank of Communications and other commercial banks in the county, branches or outlets of national joint-stock commercial banks in the county, and rural credit cooperatives, rural commercial banks, rural cooperative banks, postal savings banks, rural banks, loan companies and rural mutual funds organizations. Non-bank financial institutions mainly include policy insurance companies, commercial insurance companies, securities companies and futures companies that provide services in rural areas. Other forms mainly include small loan companies, small loan organizations and pawn shops.
Rural finance and its development: concept reconstruction from the perspective of transaction
Xiong Deping
(Business School of Ningbo University, Ningbo, Zhejiang 3 152 1 1)
Aiming at the concept defects of "rural finance" and "rural financial development" in the theory and practice of rural finance, this paper aims to reconstruct the concept connotation of "rural finance" and "rural financial development" from the perspective of new institutional economics. This paper tries to deepen the understanding of "rural finance" and "rural financial development" and lay a conceptual foundation for the sustainable development of rural finance.
Keywords rural finance; Rural financial development; From the perspective of trade