From Federalism, Chinese Style to Privatization, Chinese Style

Posted: 16 Jun 1999

See all articles by Yuanzheng Cao

Yuanzheng Cao

Institute of Economic System Reform, China

Yingyi Qian

Tsinghua University - School of Economics & Management; Centre for Economic Policy Research (CEPR)

Barry R. Weingast

Stanford University, Department of Political Science

Multiple version iconThere are 2 versions of this paper

Abstract

In 1995, China began a profound reform of its state-owned enterprises. We first describe and characterize this progress in two areas: privatization of small state-owned enterprises at the county level and mass lay-offs of excess state workers at the city level. Local governments have initiated these reforms, which are proceeding in economically and politically sensible ways. We then argue that privatization, Chinese style, rests on an adequate economic and political foundation--federalism, Chinese style. We suggest a range of incentives that propel local governments toward state-owned enterprise reform, including their harder budget constraints and increased competition from the non-state sector. In this sense, federalism, Chinese style, has induced privatization, Chinese style.

JEL Classification: H7, L30, P3

Suggested Citation

Cao, Yuanzheng and Qian, Yingyi and Weingast, Barry R., From Federalism, Chinese Style to Privatization, Chinese Style. Economics of Transition, Vol. 7, Issue 1, March 1999. Available at SSRN: https://ssrn.com/abstract=158096

Yuanzheng Cao

Institute of Economic System Reform, China ( email )

State Commission for Restructuring
the Economic System
Beijing
China

Yingyi Qian (Contact Author)

Tsinghua University - School of Economics & Management

Beijing, 100084
China

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Barry R. Weingast

Stanford University, Department of Political Science ( email )

Stanford, CA 94305-6010
United States
650-723-0497 (Phone)
650-723-1808 (Fax)

HOME PAGE: http://https://www.stanford.edu/group/mcnollgast/cgi-bin/wordpress/

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
1,250
PlumX Metrics