Institutional Foundations of New Quality Productive Forces: Market Unification, Policy Credibility, and China's Governance Transformation

Abstract

This paper develops an integrated political-economy framework to explain how institutional reforms shape the emergence of New Quality Productive Forces (NQPF) during China’s 15th Five-Year Plan. It argues that two structural constraints—spatial market segmentation and time-inconsistent policy expectations—distort factor allocation, suppress total factor productivity, and delay innovation-driven growth. Drawing on New Institutional Economics and transaction-cost theory, the study demonstrates how unified-market construction, factor-market modernization, legalised policy commitments, institutional opening-up, and central–local incentive realignment jointly reduce transaction costs and stabilise expectations. These reforms form a coherent mechanism through which China can transform institutional advantages into productivity gains. The findings highlight that NQPF formation is fundamentally an institutional process, requiring predictable, rule-based and nationally integrated governance structures.