Bureaucratic Politics and China's Anti-Monopoly Law

Abstract

This article is a first attempt to investigate Chinese bureaucratic politics in-depth in order to analyze how these dynamics affect the outcome of antitrust enforcement in China. It has two major findings. First, bureaucratic politics have a powerful impact on the allocation of economic resources in China, which in turn determines how monopolies arise in the Chinese market. Second, the bureaucratic structure and political processes of decision-making shape the incentive structures of administrative agencies, thus affecting how they regulate the economic activities of various actors in the economy. The article finds that antitrust enforcement in China is a highly pluralistic process involving officials from various central ministries and local governments with overlapping functions and divergent missions and objectives. Their incentive structure and the formal and tacit rules of the Chinese bureaucracy shape the enforcement outcome of China’s Anti-Monopoly Law.

Keywords: AML, Law Enforcement, Bureaucracy, Institutional Economics, Incentive Theory

JEL Classification: D73, P26, L51, L52, K21, K42