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University of California Press

About the Book

In this incisive analysis of one of the most spectacular economic breakthroughs in the Deng era, Jean C. Oi shows how and why Chinese rural-based industry has become the fastest growing economic sector not just in China but in the world. Oi argues that decollectivization and fiscal decentralization provided party officials of the localities—counties, townships, and villages—with the incentives to act as entrepreneurs and to promote rural industrialization in many areas of the Chinese countryside. As a result, the corporatism practiced by local officials has become effective enough to challenge the centrality of the national state.

Dealing not only with the political setting of rural industrial development, Oi's original and strongly argued study also makes a broader contribution to conceptualizations of corporatism in political theory. Oi writes provocatively about property rights and principal-agent relationships and shows the complex financial incentives that underpin and strengthen the growth in local state corporatism and shape its evolution. This book will be essential for those interested in Chinese politics, comparative politics, and communist and post-communist systems.

About the Author

Jean C. Oi is Associate Professor of Political Science at Stanford University and author of State and Peasant in Contemporary China: The Political Economy of Village Government (California, 1989).

Table of Contents

List of Illustrations and Tables 
Acknowledgments 
Note on Measures and Transliteration 

1. Institutional Foundations of Chinese
    Economic Growth: An Introduction 
    State and Development 
    A Problem of Agency 
    Property Rights and Economic Growth 
    Local State Corporatism 
    Institutional Reform, Incentives, and Change 
    Precis of the Study 
2. Reassigning Property Rights over Revenue: Incentives for Rural Industrialization 
    Dividing Property Rights 
    Decollectivization and the Loss of Income 
    Fiscal Reform and Rights to the Residual 
    Credible Commitment 
    From Limited Indirect Extractions to Direct Taxation 
    Fiscal Incentives for Local Development 
3. Strategies of Development: Variation and Evolution in Rural Industry 
    Intervening Incentives 
    The Character of Rural Industrial Growth in the 1980s 
    The Logic of Collectively Owned Enterprise Development 
    Management and Ownership in the 1990s 
    Changing Ownership Forms in Rural Industry 
4. Local State Corporatism: The Organization of Rapid Economic Growth 
    Maoist Legacy as the Foundation 
    The Local Corporate State 
    Adapting Maoist Institutions to Market Production 
    Adapting Local State Corporatism to Private Enterprise
    The Evolution of Local State-Led Development 
5. Principals and Agents: Central Regulation or Local Control 
    Overlapping Lines of Authority 
    The Corporate Nature of Local Regulation 
    Local Appropriation of Central Controls 
6. From Agents to Principals: Increasing
    Resource Endowments and Local Control 
    Regulation of Extra budgetary Funds 
    Economic Retrenchment and a Test of Central Control 
    The Erosion of Credit Controls 
    Local Corporate Interests and Collusion 
    Nonbank Sources of Capital 
    The Limits of Central Control in a Changing Economic Context 
7. The Political Basis for Economic Reform: Concluding Reflections 
    The Security of Property Rights and Economic Growth 
    The Political Consequences of Economic Reform 
    Local State Corporatism and Central Control in a Transitional System 
    Remaining Questions 

Appendix A. Research and Documentation
    The Interview Sample
    The Interview Procedure
    Limitations
Appendix B. Changes in China's Fiscal System

Bibliography
Index

Reviews

"A distinctive and important contribution."—Thomas P. Bernstein, author of Up to the Mountains and Down to the Villages