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Title: Economic rationality and political viability, prerequisites in economic reform? : a case study of China, 1978-1995
Author: Kok, F. Josephine B. de
ISNI:       0000 0004 2743 292X
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 1996
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To address the research questions - How has the Chinese government been able to produce a successful reform process and what logic has been behind it? - I develop a politico-economic framework that is largely based on a public choice model by Frey and Eichenberger (1992) and a politico-economic research methodology by Bates and Kreuger (1993). Its basic assumption is that all individuals, including bureaucrats and autocrats, maximise their own power and money subject to constraints. Secondly, it assumes that, when a new leadership rises to power, it will try to start an economic reform process in order to secure its power position. Per reform period, economic reform plans are analysed on their intended effect, implementation and actual results in pure economic terms as well as in political terms (leadership's power position). The framework hypothesises that during a reform process a government will perform a constant balancing act between the political viability with the economic rationality of each individual reform measure. This hypothesis is testedJand the Chinese reform period 1978-1995. The constraints Deng Xiaoping's leadership faces are the Communist Party's rule, a very strong bureaucracy, management of state enterprises and military, the command economy with an agricultural commune system and a revenue dependency on state owned enterprises. The hypothesis largely holds for China: agricultural reforms start with liberalisation to be later on largely retracted; real state owned enterprise reforms are never implemented; rural industrial reforms boom after tax revenues could be withheld at local level; the military's civilian industries is thriving. Unwanted results are quickly changed or retracted in the following period. Also identified is that despite these efforts, unintended interlinkage effects between the different reform measures become increasingly important and difficult to assess, resulting in a great loss of power for the leadership.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Economic policy ; China