Abstract: Modern history shows that there is a development cycle of about 80 years in big countries. The rise and decline of such countries as Portugal, Spain, Japan, Germany, and the Soviet Union have all experienced such a cycle. The process of long-term economic development of Britain and the United States also contains many such cycles. A key factor affecting the development cycle of a country is the institutional innovation, including non-systematic institutional innovation, systematic but unsustainable institutional innovation, and systematic and sustainable institutional innovation. Among them, the institutional innovations of Portugal and Spain are mainly the development mode so as to maintain their predatoriness, which belongs to non-systematic institutional innovation, and is unsustainable after all. Japan, Germany and the Soviet Union have all carried out systematic institutional innovations, however, due to their unsustainable institutional innovations, they declined eventually. While the United Kingdom and the United States have re-launched systematic and sustainable institutional innovations every time they are faced with the danger of decline, therefore, they can continue to develop smoothly and keep strong status for a long time.

Key words: development cycle, institutional innovation, sustainability, systematicness