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Reform in China and Other Socialist Economies

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This title was first published in 2000: The developmental state model, which originated in Japan, has ascended to the status of the leading paradigm for the East Asian political economy. This text explores the proposition of many specialists, that China has emulated the model and become part of the flying geese pattern of development.
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Local government entrepreneurship in China in the reform era is argued to have been, on balance, instrumental to growth and market-oriented reform.1 Economic factors are emphasized in explaining both its rise and anticipated decline. Undeveloped markets and established local state trading networks favored agencies of the local state in exploiting business opportunities arising from deregulation. However, market development and increasing autonomy of firms are now reducing the advantage of local government business agencies, and they face a diminished and changed role.
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In the past decade, Guangzhou (Canton), China, has produced mixed results in water pollution control: it has been successful in limiting pollution from industrial sources than from domestic ones. This article examines the case by reference to a growing body of literature in institutional analysis. The central arguments are that institutions affect the governance and management of natural resources by allocating decision-making authorities among different individuals, agencies and levels of governments, by affecting whether rules and regulations can be effectively enforced and by creating different incentive structures. These arguments help to explain the divergent governmental efforts and outcomes in the two types of water pollution control in Guangzhou. The article concludes by discussing the case's theoretical and practical implications.
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