Changing Incentives of the Chinese Bureaucracy
It has been increasingly recognized that the Chinese goverm-nent's newly acquired enthusiasm for economic development is a major factor explaining the relative success of China's transition from socialism. This paper argues that the changed behavior of the Chinese government is an outcome of a series of reforms of the bureaucracy. The bureaucracy was transformed from inside through a massive mandatory retirement program and a drive for administrative/fiscal decentralization. It was also changed from outside since many bureaucrats can quit government positions and join businesses. China's unique approach to reform bureaucracy without explicit political liberalization is predetermined by its initial conditions of transition.
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