Search

Why are perennially entrenched institutions so hard to reform? This article proposes a theory of institutional rebound based on China's reforms to break the three "iron-institutions" in state-owned enterprises (SOEs). I argue that reforms triggered the rise of informal institutions, which impeded further reforms and made old rules rebound. When SOE cadres had denser political connections, they actively manipulated the rules to maintain privileges. When managers and workers had fewer political resources, they used performative resistance to delay reforms and penalize reform advocates. The pressure to complete reforms drove cadres to first target the powerless, replacing them with cronies, before having to move to the more powerful. The article combines in-depth interviews, secondary sources, and topical modeling of newspaper and journal articles across three decades. [ABSTRACT FROM AUTHOR]

Conventional wisdom holds that conflict is highly likely during a power transition between declining and rising powers. The spread of global supply chains has provided new economic weapons for great powers waging these conflicts, but the businesses that constitute global supply chains can make it harder or easier for them to do so. A structural theory of business-state relations shows how power transitions affect a state's ability to exercise economic statecraft. As a dominant power and a rising power approach parity, they face structural incentives to use economic statecraft to decouple their economies. The resulting threat to businesses' profits changes business-state relations: high-value businesses within the dominant power tend to oppose their state's use of economic statecraft, whereas low-value businesses within the rising power tend to cooperate with their state's use of economic statecraft. The Anglo-German power transition from 1890 to 1914 and the U.S.-China power transition since 1990 illustrate the theory. The findings shift scholarly debates on the use of economic statecraft in modern great power competition and have policy implications for weaponizing supply chains against rising powers like China. [ABSTRACT FROM AUTHOR]