Credibility, Informal Institution, and Governmental Control

Governmental is defined as rectifying market disorder. Theoretically it is faced with the plight of both the government and the market being out of order while in practice it runs into the paradox of control and non-control. This may have resulted from our dependence on the formal institutional arrangements regarding market regulation, with informal institutional arrangements completely neglected. It is argued that it is preferable to make use of the informal institution to steady economic development while the formal institution is being perfected. The Key to perfecting the formal institution lies in standardizing governmental behavior and establishing governmental credibility. The core of the informal institution is the establishment of credibility mechanism.