Special Deals with Chinese Characteristics

50 Pages Posted: 21 May 2019

See all articles by Chang-Tai Hsieh

Chang-Tai Hsieh

University of Chicago - Booth School of Business; University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Chong-En Bai

Tsinghua University - School of Economics & Management

Zheng (Michael) Song

City University of Hong Kong (CityUHK)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2019

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.

JEL Classification: E02, F00, N00, P0

Suggested Citation

Hsieh, Chang-Tai and Bai, Chong-En and Song, Zheng (Michael), Special Deals with Chinese Characteristics (May 2019). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2019-74. Available at SSRN: https://ssrn.com/abstract=3391506 or http://dx.doi.org/10.2139/ssrn.3391506

Chang-Tai Hsieh (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chong-En Bai

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Zheng (Michael) Song

City University of Hong Kong (CityUHK) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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