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A view from behavioral political economy on China's institutional change

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  • Zhang, Yongjing

Abstract

A behavioral political economy framework is built on the basis of prospect theory to explain the induced and imposed institutional changes during China's market reform, giving special attention to the integrated effects of economic and political institutions. According to prospect theory, how rulers frame their decisions — in the prospects of gains or losses, influences how much risk they will take. China's market reform has been largely framed in the prospects of economic gains, for which the continuously growing private sector is the driving force. China's central government adopts a growth-oriented incremental reform that coincides with the prediction of prospect theory.

Suggested Citation

  • Zhang, Yongjing, 2012. "A view from behavioral political economy on China's institutional change," China Economic Review, Elsevier, vol. 23(4), pages 991-1002.
    • Handle: RePEc:eee:chieco:v:23:y:2012:i:4:p:991-1002
    DOI: 10.1016/j.chieco.2012.05.002
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    2. Shuping Wu & Zan Yang, 2023. "Government Behavior on Urban Land Supply: Does it Follow a Prospect Preference?," The Journal of Real Estate Finance and Economics, Springer, vol. 67(2), pages 264-286, August.
    3. Jiancai Pi, 2017. "An economic analysis of the political promotion system in China," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 35(2), pages 375-390.
    4. Minghui Zhang & Weiqi Xia, 2022. "Research on the Law of China’s Rural Land Institutional Changes: An Analytical Framework of Economic Efficiency and Distributive Equity," Land, MDPI, vol. 11(12), pages 1-15, December.
    5. Da Fang & Yan Guo, 2021. "Induced Agricultural Production Organizations under the Transition of Rural Land Market: Evidence from China," Agriculture, MDPI, vol. 11(9), pages 1-24, September.

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    More about this item

    Keywords

    Behavioral economics; China; Incremental reform; Institutional change; Political economy;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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