IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

The Search for a Stable Mode of Reform

Listed author(s):
  • Sheng Hong
Registered author(s):

    Reform is a change in the system. The economic system generally has three functions: incentives, resource allocation, and interest distribution. Systemic change will necessarily alter the efficiency of these three functions. Improving the efficiency of incentives and resource allocation will directly improve the productivity of resources of a given quantity and quality.>sup>1>/sup> However, if, in the course of improving incentives and resource allocation, a disequilibrium in the distribution of interests appears, then it will not only increase the cost of reform but it may well become the major cost. The reasons for this are, first, if, in the course of reform, a group of people suffers losses, it will overtly or covertly adopt an uncooperative or resistant attitude, thus increasing the cost of implementing reform. Second, unfairness in the distribution of interests will directly instigate friction among different interest groups. Losses resulting from such friction will become a direct part of the price of reform. Third, disequilibrium in interest distribution will also lead to behavior that disregards or even disrupts the existing economic order; disruption of economic order itself is a social loss. Fourth, disruption of the existing pattern of interests caused by reform can lead to relatively strong social unrest (such as the panic buying that occurred in 1988). Such social unrest would either deprive people of the expectation of stability or exact a greater price from them to overcome.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by M.E. Sharpe, Inc. in its journal Chinese Economy.

    Volume (Year): 29 (1996)
    Issue (Month): 2 (March)
    Pages: 39-59

    in new window

    Handle: RePEc:mes:chinec:v:29:y:1996:i:2:p:39-59
    Contact details of provider: Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:mes:chinec:v:29:y:1996:i:2:p:39-59. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.