Rural China Takes Off: Institutional Foundations of Economic Reform

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University of California Press, 1999 M05 17 - 259 pages
In this incisive analysis of one of the most spectacular economic breakthroughs in the Deng era, Jean C. Oi shows how and why Chinese rural-based industry has become the fastest growing economic sector not just in China but in the world. Oi argues that decollectivization and fiscal decentralization provided party officials of the localities—counties, townships, and villages—with the incentives to act as entrepreneurs and to promote rural industrialization in many areas of the Chinese countryside. As a result, the corporatism practiced by local officials has become effective enough to challenge the centrality of the national state.

Dealing not only with the political setting of rural industrial development, Oi's original and strongly argued study also makes a broader contribution to conceptualizations of corporatism in political theory. Oi writes provocatively about property rights and principal-agent relationships and shows the complex financial incentives that underpin and strengthen the growth in local state corporatism and shape its evolution. This book will be essential for those interested in Chinese politics, comparative politics, and communist and post-communist systems.
 

Contents

Fiscal Reform and Rights to the Residual
27
Credible Commitment
47
Fiscal Incentives for Local Development
56
Variation and Evolution
58
The Logic of Collectively Owned Enterprise Development
65
Management and Ownership in the 1990s
80
Changing Ownership Forms in Rural Industry
93
The Local Corporate State
99
The Corporate Nature of Local Regulation
152
Local Appropriation of Central Controls
159
Economic Retrenchment and a Test of Central Control
166
The Erosion of Credit Controls
172
Local Corporate Interests and Collusion
178
The Limits of Central Control in a Changing
189
Appendix A Research and Documentation
205
Appendix B Changes in Chinas Fiscal System
211

Adapting Maoist Institutions to Market Production
115
Adapting Local State Corporatism to Private Enterprise
128
The Evolution of Local StateLed Development
137
Bibliography
219
Index
237
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About the author (1999)

Jean C. Oi is Associate Professor of Political Science at Stanford University and author of State and Peasant in Contemporary China: The Political Economy of Village Government (California, 1989).

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