Abstract: The “formal-informal” institutional analytical paradigm of new institutional economics provides a theoretical model and tool for revealing the institutional logic of the combination of governing the party by rules and governing the party by virtue. The key to realizing the combination is to realize the complementary advantages and effectiveness supplementation of the two sets of governance norms by integrating “party morality” the basis of internal-party laws and regulations and internal-party informal system. To promote the combination of governing the party by rules and governing the party by virtue, it is necessary to give full play to the governance effectiveness of internal-party laws and regulations and “party morality” to form a joint force of governance. Any single system governance has a certain degree of system failure, inefficient governance, lack of economy and other inherent limitations. However, if the combination of the two goes beyond a certain limit, it may also lead to challenges such as poor coordination between systems, absence of institutions and lack of interaction. In view of this, under the premise of properly grasping the relationship between governing the party by rules and governing the party by virtue and the conditions and limits of institutional change, we need to rethink the interactive mode of the combination of the two, activate the endogenous power and governance demand, strengthen the supply and guarantee of the system, and comprehensively consider the cost of the construction and operation of the system, so as to better realize coordination, unity and mutual benefit of governing the party by rules and governing the party by virtue.