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Special Deals with Chinese Characteristics

Author

Listed:
  • Chong-En Bai
  • Chang-Tai Hsieh
  • Zheng Michael Song

Abstract

Chinese local governments wield their enormous political power and administrative capacity to provide “special deals” for favored private firms. We argue that China’s extraordinary economic growth comes from these special deals. Local political leaders do so because they derive personal benefits, either political or monetary, from providing special deals. Competition between local governments limits the predatory effects of special deals.

Suggested Citation

  • Chong-En Bai & Chang-Tai Hsieh & Zheng Michael Song, 2019. "Special Deals with Chinese Characteristics," NBER Working Papers 25839, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25839
    Note: DEV EFG IFM ITI POL
    as

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    References listed on IDEAS

    as
    1. Chang-Tai Hsieh & Zheng (Michael) Song, 2015. "Grasp the Large, Let Go of the Small: The Transformation of the State Sector in China," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 50(1 (Spring), pages 295-366.
    2. Yi Huang & Marco Pagano & Ugo Panizza, 2020. "Local Crowding‐Out in China," Journal of Finance, American Finance Association, vol. 75(6), pages 2855-2898, December.
    3. Chang-Tai Hsieh & Zheng (Michael) Song, 2015. "Grasp the Large, Let Go of the Small: The Transformation of the State Sector in China," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 295-366.
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    7. Zheng Song & Kjetil Storesletten & Fabrizio Zilibotti, 2011. "Growing Like China," American Economic Review, American Economic Association, vol. 101(1), pages 196-233, February.
    8. Chong-En Bai & Chang-Tai Hsieh & Zheng Michael Song, 2016. "The Long Shadow of a Fiscal Expansion," NBER Working Papers 22801, National Bureau of Economic Research, Inc.
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    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F00 - International Economics - - General - - - General
    • N00 - Economic History - - General - - - General
    • P0 - Political Economy and Comparative Economic Systems - - General

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