Search

Capital misallocation is a main obstacle to China's economic development. This paper deploys a quasi-natural experiment formed by the 'Revitalization Plan for Ten Industries' (RPTI) and examines the impacts that selective industrial policies have on capital misallocation. It is found that the RPTI significantly exacerbates capital misallocation and that the effect does not disappear when the RPTI ends. Mechanism analysis indicates that the RPTI significantly increases the capital productivity of firm groups with high capital productivity but significantly reduces the capital productivity of firm groups with low capital productivity. This can be further interpreted by a decrease or an increase of inefficient investment and financial constraints faced by the corresponding firm groups. The documented relationship is stronger in state-owned enterprises and in firms located in areas of high marketization. Our findings advance the understanding of governmental policy intervention in developing countries. [ABSTRACT FROM AUTHOR]

Japan's rapid post-war economic growth prompted Chinese leaders to look to their neighbour as they initiated market reforms from the late 1970s. How did movements of people and ideas between China and Japan occur, and what were their effects on Chinese enterprise policies? From the 1970s through the 1990s, Chinese officials, scholars, and enterprise representatives invited Japanese advisors to China, conducted myriad exchanges through associations like the Sino-Japanese Economic Knowledge Exchange and the Japan-China Economic Association, and actively studied Japan's economy and companies. Chinese policy-makers gained insights from Japan about market-responsive forms of corporate structure, organisational solutions to state ownership dilemmas, evidence that consolidation could aid economic performance and technological upgrading, and strategic commitment to building large state-owned enterprise groups. However, this episode of intense engagement between China and Japan generated neither unilateral 'diffusion' nor unitary influence. Instead, it reveals how China has developed its own path of economic development through what I term 'policy collaging': seeking, selecting, and creatively combining policy ideas and practices from international sources. [ABSTRACT FROM AUTHOR]

This article contends that increasing centralisation of decision-making in China will undermine the country's future economic growth. It highlights the declining role of private enterprises and the increasing role of state-owned enterprises (SOEs) in the economy, and the extension of Communist Party influence in both SOEs and the private sector through the Party's Organization Department and United Front Work Department. It argues that the increasing role of the state in the economy over the past decade has stifled growth through a decline in 'total factor productivity' because of increasing misallocation of resources. Centralisation, with associated losses in efficiency, objectivity, agility, speed and finesse regarding allocations of risks and investment, has debilitated decentralised decision-making and reduced the incentives for undertaking risks and innovation. The article argues that increasing Party control over the SOEs and the private sector will negatively impact the corporate structure and management decisions, exacerbate the fundamental problems of corporate governance and limit or hamper innovation. [ABSTRACT FROM AUTHOR]

This article examines the characteristics of the resource-led development project in Azerbaijan, including the policies of the Azerbaijani government and their consequences. It makes three contributions to the literature on critical development studies. First, it fills an empirical lacuna by discussing the case of Azerbaijan. Second, it expands upon the criticisms of statist-developmentalist models raised in the literature by demonstrating how the patrimonial rent distribution strategy of the Azerbaijani government plundered resource rents through state-owned enterprises and government-connected private companies, and crippled education and healthcare through underfunding and commodification. Third, as part of an examination of the recent attempts of the Azerbaijani government to diversify the economy and move to the post-oil era, it sheds light on some of the economic development challenges faced by a unique case of a resource-rich country with a closing window of energy resources. The arguments are illustrated and supported from sources pertaining to the political and economic situation in Azerbaijan, the activities of the transnational oil corporations, and US and UK foreign policies in the Caspian Sea. [ABSTRACT FROM AUTHOR]

Low-carbon development is an essential measure to combat climate change, and the establishment of low-carbon standards is an important means to achieve low-carbon development. Due to the differences in size and development level among counties of China, the applicability and fairness of county-level low-carbon standards are very important in this country. This study analyzed the trends of county-level carbon emissions in China, defined the peak value of carbon emissions per capita, summarized the characteristics of existing low-carbon standards, and proposed a fair county-level low-carbon standard based on carbon emissions per capita. The results of our analysis suggest that, under the constraints of carbon emissions reduction policies, China's carbon emissions per capita will tend towards a stable range. Additionally, by referring to predictions results of the peak value of China's carbon emissions per capita, it was determined that, in low-carbon development targets, China's county-level carbon emissions per capita should be set within the range of 2–4 tons. Besides setting low-carbon standards, the Chinese government and private enterprises should develop low-carbon technologies as soon as possible and innovate management models to achieve the win–win situation of simultaneous economic growth and carbon emissions reduction. [ABSTRACT FROM AUTHOR]

The literature on developmental states has built theories of growth-enhancing strategies through a mutually constitutive state-business relationship and institutionalised expertise through a professional bureaucracy. Whilst most evidence bears on the East Asian context, recent empirical work has focussed on state agency and new industrial policies in response to global market integration. Our paper contributes to this debate by exploring multiple patterns of state enterprise reforms that have enabled governments to generate competitive domestic firms. These reforms, then, lead to new theoretical insights as regards the diverse institutional arrangements co-constituting state-state relationships across countries and sectors. Overall, the paper views state-owned enterprises (SOEs) as complex organisations that bear new developmental capacities rather than vessels of rent-seeking interests. [ABSTRACT FROM AUTHOR]

Since the coming to power of Kim Jong Un in 2012, the North Korean government has recently announced, and to some degree has implemented, a new set of economic management policies known as the June 28th measures in 2012 and the May 30th measures in 2014. Both of these sets of measures seek to build upon the abandoned reforms of the early 2000s through restructuring North Korea's highly inefficient collective farm and state-owned enterprise management system. In addition, the government has intensified ongoing efforts at building special economic zones for the purpose of attracting foreign investment. As such, the country is attempting to emulate the reforms adopted by China in the late 1970s. Although the success of these efforts is by no means guaranteed, they do serve to question mainstream analyses that suggest thatJucheSelf-Reliance or Sŏn'gun Military First Politics ideologies will inhibit any genuine attempt at economic reform in North Korea. We argue, in contrast, that ongoing changes to North Korean state and society mean that, a cyclical stop and start rhythm to the reforms notwithstanding, such attempts at economic reform are likely to continue. However, we also argue that while the contemporary reform drive resembles and may indeed reproduce some of the successes of the Chinese experience, North Korea faces significantly greater challenges, including the greater decline of North Korean industry, local resistance to reform, and the dangers of inflation. Furthermore, North Korea faces a highly challenging external security environment that undermines the ability of the regime to attract investment and by extension the political standing of reformist elements within the country. Given this contrast with the international environment surrounding China's own reform experience, our analysis emphasises the importance of geopolitical context in shaping experiences of economic reform and of development more broadly. [ABSTRACT FROM PUBLISHER]

China has become a fast-growing economy with an unbalanced economic structure. Economic policies, especially fiscal and financial policies, contribute to the current growth model by depressing household disposable income and reducing the social services provided by the government. Laws that have been used by the government to subsidise investment and production by distorting factor markets are also to blame. Finally, rebalancing China’s growth pattern has proven to be extremely difficult due to political obstacles, including pressure from interest groups, gridlock caused by factional politics, and ideological discrimination against private entrepreneurs. [ABSTRACT FROM PUBLISHER]

This article investigates how the economic role of the state shapes the relationship between economic development and democracy. We argue that the state is not passively under the influence of socio-economic development as assumed in extant empirical studies. Through participating in economic production, the state is able to mitigate positive effect of economic development on politics through shaping the strength and preference of both the state and the societal forces in a way unfavourable for democracy. We thus model the state's economic engagement as a moderator variable to capture the variation in the effect of economic development on regime transition. Empirical analyses consistently show that state engagement attenuates the positive effect of development on probability of democratic transition. And economic development benefits democracy only when the level of state engagement in the economy is relatively low. [ABSTRACT FROM PUBLISHER]

This paper focuses on the changing governance of economic development in a globalizing era in relation to the dynamics of global value chains and global production networks. Based on recent development in such East Asian economies as South Korea, Taiwan and Singapore, I examine how, since the 1990s, the embedded relation between one variant of state institutions, known as the developmental state, and national firms, well integrated into global chains and networks spanning different territories and regions, has evolved. Because of the deepening strategic coupling of these national firms with lead firms in global industries, the developmental state's attempt to govern the market and to steer industrial transformation through direct policy interventions has become increasingly difficult and problematic. Through this process of strategic coupling, national firms have been gradually disembedded from state apparatuses and re-embedded in different global production networks that are governed by competitive inter-firm dynamics. While the state in these East Asian economies has actively repositioned its role in this changing governance, it can no longer be conceived as the dominant actor in steering domestic firms and industrial transformation. The developmental trajectory of these national economies becomes equally, if not more, dependent on the successful articulation of their domestic firms in global production networks spearheaded by lead firms. In short, inter-firm dynamics in global production networks tend to trump state-led initiatives as one of the most critical conditions for economic development. This paper theorizes further this significant role of global value chains and global production networks in the changing international political economy of development. [ABSTRACT FROM PUBLISHER]

The state sector still plays an important role in China's economy. One of the key development phenomena characterizing the Chinese economy is the rapid ascendency of state-owned enterprises (SOEs) and the resurgence of the state. The strength of China's SOEs is projected in the centrally administrated state-owned enterprises (CSOEs). They are the backbone of the national economy, spearheading national economic development and Beijing's ‘going-out’ strategy. The CSOEs have expanded their reach and increased their power, domestically and globally. In seeking to boost local GDP growth, the eastern provinces in China have joined the western provinces in a fierce contest to attract investment from SOEs. Nevertheless, the rapid ascendency of the SOEs has brought many negative consequences for China's economic, social and political development by causing conflict with the market-oriented development direction of Chinese economic reform and hindering fair competition between state-owned and non-state-owned enterprises. [ABSTRACT FROM PUBLISHER]

China’s emergence as a global development actor has implications for developing countries and “traditional” donor agencies. Its current provision of foreign aid and other forms of development assistance to developing countries throughout the world presents both opportunities and challenges for all actors. At the same time, China’s growing need for natural resources and its policy of securing access through state-led “resource diplomacy” are causing concern. While most scholars and commentators are focused on the “China in Africa” dimension, China’s engagement in the South Pacific region has also been growing rapidly over the past decade and offers some interesting and unique insights. This article examines the dynamics of China’s provision of foreign aid and its quest for natural resources in the South Pacific region, with comparative references to other regions. Drawing particularly upon interviews and site visits in Fiji and Papua New Guinea, it argues that although major commercial resource contracts do appear to be supported by Chinese Government assistance, resources deals are not explicitly part of Chinese foreign aid in the region. [ABSTRACT FROM PUBLISHER]

One of the most striking features of the economic development that has occurred in the East Asian region has been the influential role of the state in directing its course. Vietnam is also following this well-worn path of state-led developmentalism. The principal contribution of this paper is two-fold. First, we place the Vietnamese experience in comparative historical and conceptual perspective. It is suggested that the structure of the Vietnamese state itself and the distinctive nature of the policies it has undertaken are reflections of the country's traumatic recent history and the fact that its leadership is notionally “communist.” Our second contribution is to detail some of the more important aspects of this process. We provide two case studies which focus on the role of state-owned enterprises and decentralisation initiatives which demonstrate that, despite the frequently ad hoc and contingent nature of the developmental project and an absence of the sort of state capacity that distinguished the likes of Japan in its heyday, the Vietnamese government is overseeing economic development in creative and surprisingly effective ways. [ABSTRACT FROM PUBLISHER]

The article discusses China's geostrategic approach to energy security. It comments on the prominence of state-owned enterprises (SOEs) within China's energy sector and considers China's economic nationalism in the international oil market. The author considers China's dependence on foreign oil and its desire to secure an external oil supply that is cheap and reliable. He also considers political aspects of Chinese energy security, reflecting on the need of the Chinese Communist Party (CCP) to achieve rapid economic growth to maintain stability. The impact of the Chinese energy strategy on relations with Western liberal democracies, particularly the U.S., is also examined.

Corporate governance is central to the effective and profitable management of corporations. This applies to all corporations. State-owned enterprises (SOEs) are in a unique position as they have to address commercial and social functions. Thus, the need to develop and maintain a comprehensive corporate governance framework is even greater for SOEs than private corporations. The concept of corporate governance for SOEs in Uganda has received very little attention. This is evident in the Draft Petroleum (Exploration, Development, Production, and Value Addition) Bill 2010 (the 'Petroleum Bill 2010'). The aforementioned bill makes no reference to corporate governance, yet it provides for the creation of a national oil company (NOC) under the Companies Act. Further, the current Companies Act Cap 110 has no corporate governance code; however, it is under review and will be amended soon. Although the Companies Bill 2009, the proposed amendment, provides for corporate governance, it makes it optional and does not address the corporate governance needs of SOEs. On the other hand, Norway has taken very big strides in building a formidable corporate governance framework. The Norwegian state oil company is one of the beneficiaries of good corporate governance for SOEs in Norway The contribution of the oil sector to the economy of Uganda, one of the least developed countries in the world, merits discussion. It is worth noting that oil production may be the dawn of economic prosperity in Uganda. The International Monetary Fund has noted that, while it may be too early to forecast the benefits of oil production in Uganda, oil revenues are expected to exceed one-third of total government revenue and to contribute eight per cent of gross domestic product (GDP). Despite the importance of the oil sector to Uganda, literature on the subject, especially in the academic sector is still thin on the ground. This article addresses the concept of corporate governance in the discussion of the proposed NOC and the oil sector generally in Uganda. [ABSTRACT FROM AUTHOR]

Vietnam today is less in a process of transition from 'plan' to 'market' than in a process of state consolidation with clear parallels in the colonial period. The authors focus on four aspects of Vietnamese political economy under the colonial and post-colonial regimes: the interpenetration of state and enterprise through state-created monopolies; the interaction of regional and ethnic dynamics with the monopolies; the 'illegal' activities (smuggling, 'fence-breaking', etc) that accompanied the monopolies; and the way monopolies have served as bases for rampant diversification into speculative ventures. The parallels across the eras call into question conventional notions of rupture, and confirm the importance of structural constraints that continue to shape Vietnam's political economy. [ABSTRACT FROM AUTHOR]

This study examines the causes of conflict between the Iranian state and the country's informal economic sectors during the years prior to the 1979 revolution. It adopts an institutionalist approach to argue that the state's introduction of new norms to guide the behaviour of key economic institutions resulted in acute conflict between the state and informal economic sectors. Institutions of credit lending, norms of reputation, and the characteristics of Iran's 'bazaar sectors' are examined in detail to substantiate the study's central arguments. [ABSTRACT FROM AUTHOR]

We highlight the role of natural resources in countries that use resource revenues to subsidize employment in state-owned services sectors by developing a model of service provision where domestic incumbents and a foreign entrant compete. We find that when natural resource prices have a higher likelihood of increasing, domestic firms control most of the market share but that industry output drops. However, the output of the services industry rises with domestic firms losing market share when natural resource prices are likely to go down. This suggests that a government focused narrowly only on the growth and development of its economy would prefer services liberalization when natural resource prices are likely to be higher. [ABSTRACT FROM AUTHOR]

The Vietnamese economy has by most standards performed very well over the last decade. For instance, economic growth has averaged around 8 per cent per year during the 1990s. The high growth rate has mainly been achieved through large increases in investment, and a large share of the investment has come from foreign sources. However, it is likely that the Asian crisis will lead to a significant reduction in the inflows of foreign capital, which will make it difficult to maintain a growth strategy based on increased capital formation. Continued high growth requires improved economic efficiency. Such efficiency gains have to focus on the state-owned enterprises that account for a large share of the Vietnamese economy, but are known to face serious efficiency and profitability problems. This paper discusses economic consequences of some different choices regarding the role of the state-owned sector. We discuss two scenarios where the state will continue to play a dominant role – centralized or localized state-owned enterprises – and two scenarios with a stronger private sector – supporting the establishment of new private firms and privatizing existing state-owned enterprises. [ABSTRACT FROM AUTHOR]