The Theoretical and Practical Implications of China's Development Experience: The Role of Informal Economic Practices

China's economic reform has been understood mainly in terms of the "new institutional economics," emphasizing the role of marketized private firms and related laws. Andrew Walder and Yingyi Qian, however, have pointed out instead the crucial role played by Chinese local governments, e...

Full description

Saved in:
Bibliographic Details
Published in:Modern China 2011-01, Vol.37 (1), p.3-43
Main Author: Huang, Philip C. C.
Format: Article
Language:English
Subjects:
Capitalism
China
Competition
Corporations
Crises
Development
Economic Change
Economic competition
Economic dependence
Economic Development
Economic growth
Economic reform
Environmental degradation
Environmental protection
GDP
Gross Domestic Product
Informal economy
Informal groups
Informal sector
Institutional economics
Investment
Investments
Land
Local Government
Peasant class
Peoples Republic of China
Planned economies
Political change
Reform
Reforms
Regulation
Rules
Subsidies
Taxation
Villages
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:China's economic reform has been understood mainly in terms of the "new institutional economics," emphasizing the role of marketized private firms and related laws. Andrew Walder and Yingyi Qian, however, have pointed out instead the crucial role played by Chinese local governments, especially their township and village enterprises. Neither interpretation, however, can account for what has happened in China since the mid-1990s, when the main engine for development shifted to local governments' competition for and active support of outside investment. Typically, local governments have provided land and related infrastructural support below cost, plus special subsidies and tax privileges, and also circumvented formal rules and regulations on labor use and environmental protection. Those informal practices and the huge accompanying informal economy, not just the new enterprises drawn in, have been the main dynamic both for China's striking GDP growth and its mounting social and environmental crises. The analysis presented here is historical-cum-theoretical and calls for a new understanding of China's development experience and of its practical implications.
ISSN:0097-7004
1552-6836
DOI:10.1177/0097700410386434