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China as a Developmental State

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  • John Knight

Abstract

The paper examines the notion of a ‘developmental state’ and shows that China possesses the characteristics of a developmental state. It explains the political economy which generated such a state in China and in some other economies. It analyses the methods and mechanisms that were introduced to create a developmental state, in particular the incentive structures that the leadership used to solve the principal-agent problem. These include personnel policies, fiscal decentralization, and patronage relationships. That leads to a review of its successes, limitations and adverse consequences, and to the question: can China’s developmental state be sustained? Conclusions are drawn for both China and other developing countries.

Suggested Citation

  • John Knight, 2012. "China as a Developmental State," CSAE Working Paper Series 2012-13, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2012-13
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    Cited by:

    1. Shi, Jinchuan & Zhang, Xiaoqian, 2018. "How to explain corporate investment heterogeneity in China's new normal: Structural models with state-owned property rights," China Economic Review, Elsevier, vol. 50(C), pages 1-16.
    2. Boddewyn, Jean J., 2016. "International business–government relations research 1945–2015: Concepts, typologies, theories and methodologies," Journal of World Business, Elsevier, vol. 51(1), pages 10-22.
    3. John Knight, 2021. "A Tale of Two Countries and Two Stages: South Africa, China and the Lewis Model," South African Journal of Economics, Economic Society of South Africa, vol. 89(2), pages 143-172, June.
    4. Mária Csanádi, 2017. "Chinese Power Structure and Its Transformation in Comparative Perspective," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(Sepcial I), pages 7-20.
    5. Tan, Hao & Thurbon, Elizabeth & Kim, Sung-Young & Mathews, John A., 2021. "Overcoming incumbent resistance to the clean energy shift: How local governments act as change agents in coal power station closures in China," Energy Policy, Elsevier, vol. 149(C).
    6. Philip Arestis & Nikolaos Karagiannis & Sangkwon Lee, 2021. "The economic growth of China: enabling politico-institutional and socio-cultural factors," Review of Evolutionary Political Economy, Springer, vol. 2(2), pages 339-358, July.
    7. Weiqing Song, 2019. "Logic of the Chinese developmental state and China’s geo-economic engagement with Central and Eastern Europe," Asia Europe Journal, Springer, vol. 17(4), pages 387-401, December.
    8. Peng Bin & Andrea Fracasso, 2017. "Regional Consumption Inequality in China: An Oaxaca-Blinder Decomposition at the Prefectural Level," Growth and Change, Wiley Blackwell, vol. 48(3), pages 459-486, September.
    9. Naseemullah, Adnan, 2023. "The political economy of national development: A research agenda after neoliberal reform?," World Development, Elsevier, vol. 168(C).
    10. Andrea Fracasso, 2015. "Economic Rebalancing and Growth: the Japanese experience and China’s prospects," DEM Discussion Papers 2015/07, Department of Economics and Management.
    11. Weimin Zhang & Wangrong Ma & Qiwei Chen, 2022. "Does Regional Development Policy Promote Industrial Structure Upgrading? Evidence from the Yangtze River Delta in China," Sustainability, MDPI, vol. 14(13), pages 1-21, July.
    12. 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.
    13. Marson, Marta & Savin, Ivan, 2022. "Complementary or adverse? Comparing development results of official funding from China and traditional donors in Africa," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 189-206.
    14. Andrew Flynn & Li Yu, 2020. "The Protean Environmental State in Dongguan: Reconceptualising the local state and ecological development in China," Environment and Planning C, , vol. 38(3), pages 443-463, May.
    15. Wagner, Helmut, 2017. "On the (non-)sustainability of China’s development strategies," CEAMeS Discussion Paper Series 6/2017, University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS).
    16. Han, Enze & Paik, Christopher, 2017. "Ethnic Integration and Development in China," World Development, Elsevier, vol. 93(C), pages 31-42.
    17. Bolesta, Andrzej, 2015. "Creating a Post-Socialist Developmental State: The Political Economy of China’s Transformation and Development," Studia z Polityki Publicznej / Public Policy Studies, Warsaw School of Economics, vol. 2(4), pages 1-24, December.
    18. Shen, Xiaoxiao & Tsai, Kellee S., 2016. "Institutional Adaptability in China: Local Developmental Models Under Changing Economic Conditions," World Development, Elsevier, vol. 87(C), pages 107-127.
    19. Székely-Doby, András, 2017. "A kínai fejlesztő állam kihívásai [Challenges to the Chinese developmental state]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 630-649.
    20. John Knight, 2017. "China’s evolving inequality," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 15(4), pages 307-323, October.
    21. Schmalz, Stefan & Gräf, Helena & Köncke, Philipp & Schneidemesser, Lea, 2022. "Umkämpfte Globalisierung: Amerikanische und europäische Reaktionen auf Chinas Aufstieg im Hochtechnologiebereich [Contested globalization: US and EU responses to China’s rise as a high-tech power]," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(3), pages 427-454.

    More about this item

    Keywords

    China; Developmental state; Economic growth; Incentives; Principal-agent problem; Virtuous circle;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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