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Chinese township village enterprises as vaguely defined cooperations

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  • Weitzman, M
  • Xu, Chenggang

Abstract

This paper concerns the paradoxes and dilemmas that the very successful "Chinese model" presents for transition theory. The "Chinese model" is centered on the development of township-village enterprises. The main purpose of this paper is to make the case that TVE's are not just some form of disguised capitalist institution; they are much better described as "vaguely defined cooperatives" - meaning an essentially communal organization extremely far removed from having a well defined ownership structure. That a transition strategy based on vaguely defined cooperatives should be so successful presents a severe challenge for traditional property rights theory. We speculate that to address this challenge properly, traditional property rights theory should be extended by including a dimension corresponding to the degree of individualism/cooperation existing in a society. A model of the required extension is described. Implications and applications are discussed.

Suggested Citation

  • Weitzman, M & Xu, Chenggang, 1993. "Chinese township village enterprises as vaguely defined cooperations," LSE Research Online Documents on Economics 3754, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:3754
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