Non-governmental Chambers of Commerce in Wenzhou: An Explanation from the Angle of Institutional Analysis

Abstract

From the angle of institutional analysis, the paper makes a comprehensive, systematic and profound analysis of the institutional features, incentive mechanism and supervisory mechanism of non governmental chambers of commerce in Wenzhou which have been established in the past ten years, thus revealing the inner mechanism and structural features of these spontaneous, autonomous and service organizations. It can be found from the institutional features that the institutional supply of the chambers of commerce in Wenzhou is made possible not only by governments but also by the chambers themselves. The rules and regulations, as the fundamental institution of the chambers, are established by the interplay of both the chambers and the governments. In the management practice of chambers, the internal institution based on collective spontaneity play a guiding role. But the internal institution, according to which punishment for actions in violation of the rules and regulations are enforced by the system of decentralization, spontaneous feedback from society, or by the official, organizational system, can be classified into formal and informal rules and regulations. The incentive mechanism of the chambers of commerce includes material incentive, for unity and purposes, and different selective incentives for such different level people as common members, core members and full time personnel. This has thus attracted more and more corporations to participate in the management of the chambers of commerce, whose supervisory mechanism features dual characters of institutionalization and moral driveness. On the one hand the chambers of commerce have become more and more institutionalized and standardized, and on the other hand the non governmental chambers in Wenzhou, self governing organizations which appeared not long ago after all, cannot be as highly institutionalized and standardized as the governmental organizations. That is why the working of the supervisory mechanism of thechambers depends largely on the moral driven self discipline of their leaders. And the networked organization structure provides a low cost participating network, which results in the superiority of organizational supervision. Finally, it is pointed out that after China's entry into the WTO, it is very important work for the State government and Chinese people to speed up the setting up and development of trade associations so as to adapt to the government reform and market economy. The successful experience of the said chambers and trade associations in Wenzhou provides some examples and reference for the construction and development of those in other parts of the country.