China as a regulatory state
AbstractMarket economy models differ in the degree of the power of the government vis-à-vis the market in the economy. Under the classications set forth by Glaeser and Shleifer (2002, 2003), and Djankov et al. (2003), these market models range from those emphasizing low government intervention in the market (private orderings and private litigation through courts) to those where the state is an active participant (regulatory state). This paper, using data from a survey of 3,073 private enterprises in China, constructs an index to quantify the power of the government vis-à-vis the market. Regional government power is found to vary considerably across China's regions. Notably, enterprises located in regions where government exerts more power in the market perform better, suggesting that the regulatory state model of the market economy is appropriate for China.
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Bibliographic InfoPaper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 17/2009.
Length: 40 pages
Date of creation: 21 Oct 2009
Date of revision:
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regulatory state; disorder costs; dictatorship costs; market economy models; China's economic reform;
Find related papers by JEL classification:
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-31 (All new papers)
- NEP-DEV-2009-10-31 (Development)
- NEP-REG-2009-10-31 (Regulation)
- NEP-TRA-2009-10-31 (Transition Economics)
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