The Evolution Of State Institutional Capacities In The Process Of Economic Transformation

The social economic transition occurring in China and Russia in the end of20thcentury was an extensive institutional changes process which involved many areas.However, in the process from planned economy to market economy, the transitionalroutes and performance appeared obvious differentiation between China and Russia.At the beginning of transition, although Russia followed the standard transitionalstrategy supported by the western mainstream economics—Washington consensus, itsank into protracted economic recession and social order fission; while Chinamaintained sustained raid economic development and basic stability of social orderduring the gradual process of reforming and opening, which created “Chinesemiracle” of economic transition. Despite many political, economic and social factorshad different influence on Chinese and Russian transitional performance, thedifference of the construction strategy and evolutionary path of state institutionalcapacity is the key variables which decided the difference of transitionalperformance between China and Russia.In the research perspective of state institutional capacity, this paper analyzesChinese and Russian economic transitional path, performance and futuredevelopmental trend, probes into the internal formation mechanism of the twodifferent evolutionary paths of state institutional capacity, as well as the intrinsicconnection between the difference of state institutional capacity and the difference oftransitional economic performance, assesses and compares Chinese and Russianstate institutional capacities, and finally comes to some conclusions and suggestionsabout the state institutional capacity construction and economic development oftransitional countries and developing economies. Researching Chinese and Russianeconomic transition in the point of state institutional capacity reflects a systemicresearching perspective of “great transformation” and an analytic paradigm ofcomparative political economy. It contributes to comprehensively and accuratelygrasping the whole evolutionary path of transition, deeply discerning the coreinstitutional problem in transitional process, and exploring the effective institutional reform strategy in the stage of transitional deepening. Studying the evolutionaryproblem of state institutional capacities in Chinese and Russian transitionalprocesses not only supplies theoretic resources and experiential supports fortransition economics, institutional economics, and development economics etc, butalso creates a brand new knowledge growth point for the further development ofthese disciplines. In this paper, the research content and frame structure are arrangedas follows:Chapter one is introduction. This chapter firstly begins from the understandingof the transition puzzle in China and Russian, and leads to the research topic of stateinstitutional capacity. Secondly, it reviews and comments the research on economictransition, institutional change and state capacity in Chinese and foreign academia.Thirdly, it elaborates the research contents and methods. Finally, it summarizes theresearch ideas and innovation of this paper.Chapter two establishes the theoretic analysis framework for researching theeconomic transition and the evolution of state institutional capacity in China andRussia. Firstly, this chapter takes the institution and economic development as thelogic starting point of reaching state institutional capacity, and on the basis ofanalyzing the inherent relationship among state, institution and economicdevelopment, it also defines the state institutional capacity as the capacity that state’sestablishing institutions, implementing institutions and promoting institutionalchanges. Secondly, the chapter divides the state institutional capacity compositionsinto the state’s capacities of institutional formation, institutional implementation andinstitutional adaptation and learning, clearly defines the connotation of the threeparts of state institutional capacities, and deeply analyzes the affecting factors of thethree state institutional capacities. Finally, using a game model between state andsociety, the chapter analyzes the relationship between state’s governance pattern andstate institutional capacity from the static perspective, and on this basis, it researchesthe two evolutionary paths of state institutional capacity from the dynamicperspective i.e. the organic construction path and negative degradation path, andfinally summarizes the necessary conditions of constructing state institutionalcapacity. Chapter three analyzes the internal relationship between state institutionalcapacity and economic transition more deeply. Firstly, starting from criticizing theeconomic transitional conception of Neo-liberalism, the chapter refines andsummarizes the economic transitional conception of institutionalism, and studies thecharacteristics of economic transition by the subjective game model of comparativeinstitutional analysis school. Secondly, it describes the differentiation of economicperformance in transitional process, and comments on three representativeviewpoints of explaining transitional performance differentiation, and on this basis itpresents the state institutional capacity as the key variables of affecting transitionalperformance, and constructs a optimal allocation model between state institutionalcapacity and social ability, in order to analyze the internal relationship between stateinstitutional capacity and transitional economic performance.Chapter four transfers the research contents from qualitative analysis toquantitative analysis. The chapter constructs a evaluation index system of stateinstitutional capacity which has three indexes in one-level and eight indexes intwo-level, and applies the index system to assess and compare the state’s capacitiesof institutional formation, institutional implementation, and institutional adaptationand learning between China and Russia, on this basis, it also compares thecomprehensive state institutional capacities of the two countries. Through thecomparison, the chapter summarizes that Russian state institutional capacity patternhas three characteristics:“collusive state”,“predatory state” and “failed state”; andChinese state institutional capacity pattern has three comprehensive characteristics:“autonomy state”,“developmental state” and “strong state”.Chapter five studies the inherent formation mechanism of Russian stateinstitutional capacity decline and transitional crisis in transition. Firstly, the chapterstudies the formation of planned economy system in former USSR and the rise of itsstrong state, and analyzes the process of the economic reform and institutionalcapacity weakening. Then it studies the inherent mechanism of Russian state’sinstitutional deconstruction and capacity decline in the Yeltsin era, i.e. the radicaltransitional strategy led to the rigid of state’s institutional formation capacity; thedisintegration of institutional structure led to the depletion of state’s institutional implementation capacity; the constraint of interest groups led to the loss of state’sinstitutional adjustment capacity. On the basis, this paper analyzes the relationshipbetween Russian state institutional capacity decline and transitional crisis. Finally,this chapter further researches the transformation of state governance strategy duringthe Putin presidency and Medvedev&Putin term, the strategic measures ofremodeling Russian state institutional capacity, and analyzes and looks forward thefuture transitional path and direction of improving state institutional capacity inRussia.Chapters six turns to in-depth study of the relationship between the cultivationof state institutional capacity and the transitional miracle in China. Firstly, thechapter studies the forming process of planned economy system under the support oftotalism state, and analyzes the influence of the tortuous exploration of plannedeconomy on state institutional capacity. Secondly, it focuses on the internalmechanism of state institutional capacity construction and cultivation during theperiod of Chinese transition, i.e. the flexible transformation of state’s governancegoals promotes the formation of effective reform capacity; the appropriateadjustment of the state’s power and range maintains the state’s necessary capacity ofinstitutional implementation; the adaptable adjustment according to the changes ofinternal and external environment enhances state’s capacity of institutional leaning.On the basis, it studies the relationship between the cultivation of state institutionalcapacity and transitional miracle in China. Finally, basing on the new challenges inthe era of economic transitional deepening and post financial crisis, the paper focuson the strategic initiatives of improving and enhancing state institutional capacity,and analyzes the direction of upgrading state institutional capacity and promotingtransition-development in China.Chapter seven summarizes the whole paper and reaches some conclusions andenlightenments. The main research contents and conclusions involves three aspects:(1) The state institutional capacity is a brand new theoretical perspective tounderstanding economic transition and economic development;(2) The stateinstitutional capacity is the key variable which leads to the transitional performancedifference in China and Russia;(3) The construction of state institutional capacity is an important strategic measure for transitional countries in the era of transitionaldeepening and post international financial crisis. This paper draws three aspects ofimportant enlightenments for the institutional construction and economicdevelopment of transitional countries and developing economies: Firstly, thepromotion of social economic transition can not be at the expense of stateinstitutional capacity loss, therefore, we should pay attention to the transitionalstrategy selection, and to maintain the relative stability and continuity of institutionalchanges. Secondly, in the economic transition, there are three key issues should bewell handled in building state institutional capacity i.e. the construction of state itself,the adjustment between state and market, and the coordination between state andsociety. Finally, in the stage of transitional deepening, we should pay attention to thelinkage effect of internal and external environment in the construction of stateinstitutional capacity, in order to ensure the autonomy and effectiveness of state’sdevelopment.