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Pareto-Improving Economic Reforms through Dual-Track Liberalization

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  • Lawrence J. Lau
  • Yingyi Qian
  • Gerard Roland

Abstract

Pareto-improving economic reforms that also simultaneously achieve efficiency can be implemented through a strategy of "dual-track" liberalization. Its success requires the feasibility of the original plan and its continued enforcement by the state. The Chinese experience demonstrates that such a strategy works. Keywords: economic reform, transition, political economy, dual track, China. JEL classification: P21

Suggested Citation

  • Lawrence J. Lau & Yingyi Qian & Gerard Roland, "undated". "Pareto-Improving Economic Reforms through Dual-Track Liberalization," Working Papers 97007, Stanford University, Department of Economics.
    • Handle: RePEc:wop:stanec:97007
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    File URL: http://www-econ.stanford.edu/faculty/workp/swp97007.pdf
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    References listed on IDEAS

    as
    1. McMillan, John & Naughton, Barry, 1992. "How to Reform a Planned Economy: Lessons from China," Oxford Review of Economic Policy, Oxford University Press, vol. 8(1), pages 130-143, Spring.
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    Cited by:

    1. Che, Jiahua & Facchini, Giovanni, 2007. "Dual track reforms: With and without losers," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2291-2306, December.
    2. Joseph, Kelli L., 2010. "The politics of power: Electricity reform in India," Energy Policy, Elsevier, vol. 38(1), pages 503-511, January.
    3. Guy Shaojia Liu & Haiyan Song, 2003. "A Dual-Price Demand Theory for Economies under Transition," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 1(2), pages 185-203.
    4. Ma, Yuanyuan & Walsh, Patrick Paul, 2013. "Party Membership and State Jobs in Urban China," IZA Discussion Papers 7643, Institute of Labor Economics (IZA).
    5. Lu Ming & Zhao Chen & Yongqin Wang & Yan Zhang & Yuan Zhang & Changyuan Luo, 2013. "China’s Economic Development," Books, Edward Elgar Publishing, number 14502.
    6. Roland, Gerard & Verdier, Thierry, 2003. "Law enforcement and transition," European Economic Review, Elsevier, vol. 47(4), pages 669-685, August.
    7. Jiahua Che & Giovanni Facchini, 2004. "Dual Track Liberalization: With and Without Losers," William Davidson Institute Working Papers Series 2004-669, William Davidson Institute at the University of Michigan.
    8. Vladimir Popov, 2006. "Shock Therapy Versus Gradualism Reconsidered: Lessons From Transition Economies After 15 Years Of Reforms," Working Papers w0068, Center for Economic and Financial Research (CEFIR).
    9. C. A. Claussen, 2002. "On the Dynamic Consistency of Reform and Compensation Schemes," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(3), pages 133-144.
    10. Wei Li, 2000. "Corruption and Resource Allocation Under China's Dual Track System," Econometric Society World Congress 2000 Contributed Papers 0179, Econometric Society.
    11. Lawrence J. Lau & Yingyi Qian & Gerard Roland, 2000. "Reform without Losers: An Interpretation of China's Dual-Track Approach to Transition," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 120-143, February.
    12. SHEA, Esther Y.P., 2010. "Understanding China's grain procurement policy from a perspective of optimization," China Economic Review, Elsevier, vol. 21(4), pages 639-649, December.
    13. Brousseau, Eric & Garrouste, Pierre & Raynaud, Emmanuel, 2011. "Institutional changes: Alternative theories and consequences for institutional design," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 3-19, June.
    14. Cooter, Robert D, 2005. "Innovation, Information, and the Poverty of Nations," Berkeley Olin Program in Law & Economics, Working Paper Series qt9sz547bd, Berkeley Olin Program in Law & Economics.
    15. Michael Mandler, 2001. "Accessible Pareto-Improvements: Using Market Information to Reform Inefficiencies," William Davidson Institute Working Papers Series 398, William Davidson Institute at the University of Michigan.
    16. Cooter, Robert D., 2005. "Law, Information, and the Poverty of Nations," Berkeley Olin Program in Law & Economics, Working Paper Series qt4hd374nq, Berkeley Olin Program in Law & Economics.
    17. Fardmanesh, Mohsen & Tan, Li, 2003. "Wage and price control policies in transition economies," Journal of Development Economics, Elsevier, vol. 70(1), pages 173-200, February.
    18. Acharya Sanjaya & Signorelli Marcello & Vojinovic Borut & Oplotnik Žan Jan, 2013. "Alternative Approach to Economic Restructuring to Benefit the Poor – Sam Multipliers Analysis as Alternative Approach," Scientific Annals of Economics and Business, Sciendo, vol. 60(1), pages 182-201, July.
    19. Yingyi Qian, 1999. "The Institutional Foundations of China's Market Transition," Working Papers 99011, Stanford University, Department of Economics.
    20. John Bennett & Huw Dixon & Helen X.Y. Hu, 2008. "The Effects of Reforming the Chinese Dual-Track Price System," CEDI Discussion Paper Series 08-14, Centre for Economic Development and Institutions(CEDI), Brunel University.
    21. Bennett, John & Dixon, Huw & Hu, Helen X.Y., 2013. "The transition from dual-track pricing to a market system: Winners and losers," Economic Systems, Elsevier, vol. 37(1), pages 30-44.
    22. Gerard Rpland, 2001. "The Political Economy of Transition," William Davidson Institute Working Papers Series 413, William Davidson Institute at the University of Michigan.
    23. Tran, Hien Thu & Santarelli, Enrico, 2018. "Successful Transition to a Market Economy in Vietnam: An Interpretation from Organizational Ecology Theory," GLO Discussion Paper Series 181, Global Labor Organization (GLO).

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    More about this item

    Keywords

    economic reform; transition; political economy; dual track; China;
    All these keywords.

    JEL classification:

    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform

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