Institutional change, local developmentalism, and economic growth: The making of semi-federalism in reform China

How has China achieved rapid economic growth in the post-Mao era? And how has economic modernization changed the state structure? This study takes an institutional approach to these issues by focusing on the impact of intergovernmental decentralization on economic development and its political consequences. It particularly stresses the continuing importance of central-local linkages and shows how China is evolving toward a de facto federal structure while maintaining the norms of a de jure unitary state.; The study contends that intergovernmental decentralization, which devolves decision-making power from the center to lower levels of the polity, is a relatively institutionalized pattern that involves an explicit or implicit bargaining between the central state and provincial governments. One aspect in the bargain is that the local governments receive certain institutionalized or ad hoc benefits in return for guarantees by the government officials that they will behave in a certain way on behalf of the central government. Intergovernmental decentralization creates an institutional setting for local developmentalism--development-oriented local government--to occur. Local developmentalism promotes local economic growth and leads to a power shift from the center to provincial governments. While the center strengthens some aspects of its decision-making power, provincial governments become increasingly independent within their own jurisdictions.; The study uses many kinds of sources, including Chinese documents, interviews in China. It treats intergovernmental decentralization in taxation, banking, and management. It also exemplifies its themes with extended case studies of three regions: Southwest China, Jiangsu, and Zhejiang.