Informally Institutional Reform of Taxi Regulation

There are many informal institutions of taxi regulation causing social welfare loss. The traditional view is that informal institution is a kind of cultural endowments which is essentially immutable or changes very slowly and then can not be created consciously by people. In this paper, the informal institutions of taxi regulation have been found that they are based on the formally regulatory institutions of taxi. This paper argues that the relationship between informal constraints causing social welfare loss and formally regulatory institution of taxi industry and the reform way of informal institution to maximize social welfare.