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The Political Foundation of Chinese Style Gradualism: A Paradox of too Strong Private Interests?

Author

Listed:
  • Christian Henning
  • Xiaobo Lu

Abstract

We present a game-theoretical model of policy reforms focused on institutional reforms of the political system. We show that (i) gradual reforms in China can be understood as the result of a relatively weak organization of private interests unable to replace the Communist Party at once, but strong enough to credibly demand reforms. (ii) Gradual transition, may be preferable in comparison to a big-bang transition if private interests are largely fragmented. (iii) A dilemma of too strong private interests exists: They may collectively prefer a gradual transition, but due to their commitment problem are forced into a big-bang transition.

Suggested Citation

  • Christian Henning & Xiaobo Lu, 2000. "The Political Foundation of Chinese Style Gradualism: A Paradox of too Strong Private Interests?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(1), pages 1-35, March.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200003)156:1_35:tpfocs_2.0.tx_2-p
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    Citations

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    Cited by:

    1. Catherine Locatelli & Dominique Finon, 2004. "The failure of introducing market institutions in a rent sector into an economy in transition," Post-Print halshs-00001302, HAL.
    2. Elitsa R. Banalieva & Kimberly A. Eddleston & Thomas M. Zellweger, 2015. "When do family firms have an advantage in transitioning economies? Toward a dynamic institution-based view," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1358-1377, September.
    3. Roland Kirstein & Stefan Voigt, 2006. "The Violent and the Weak," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(4), pages 863-889, October.

    More about this item

    JEL classification:

    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H49 - Public Economics - - Publicly Provided Goods - - - Other

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