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Gifts, Favors, and Banquets: The Art of Social Relationships in China

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Gifts, Favors, and Banquets: The Art of Social Relationships in China

Abstract

An elaborate and pervasive set of practices, called guanxi, underlies everyday social relationships in contemporary China. Obtaining and changing job assignments, buying certain foods and consumer items, getting into good hospitals, buying train tickets, obtaining housing, even doing business-all such tasks call for the skillful and strategic giving of gifts and cultivating of obligation, indebtedness, and reciprocity. Mayfair Mei-hui Yang's close scrutiny of this phenomenon serves as a window to view facets of a much broader and more complex cultural, historical, and political formation. Using rich and varied ethnographic examples of guanxi stemming from her fieldwork in China in the 1980s and 1990s, the author shows how this "gift economy" operates in the larger context of the socialist state redistributive economy.
... Some regard strong ties and closed groups as more effective for social-capital acquisition (Bian & Ang, 1997;Coleman, 1990), while others believe that large, open networks are most beneficial (Burt, 2001;Granovetter, 1983). For example, in cross-cultural studies, scholars have been particularly focused on relatively open networks, such as guanxi in China (Bian, 1997;Li, 2007;Luo, 2011;Luo, 2000;Yang, 1994) and blat in Russia (Ledeneva, 1998). Kinshipbased networks have only recently started gaining some attention (Ford, 2018;Hotho, et al., 2018;Minbaeva & Muratbekova-Touron, 2013. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Using these features, we differentiate among four types of informal networks: "relatively closed," "relatively open," "relatively instrumental," and "relatively affective." ...
... Similar to some instrumental networks, guanxi historically "served many functions of the missing 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 market economy" (Yang, 2018: 77). During the Maoist period, guanxi emerged in response to the state-run socialist society in which goods, jobs, housing, and other life opportunities were controlled by the state (Yang, 1994). The use of guanxi has not declined but its nature has changed. ...
... Although informal networks are present in all countries, studies of informal networks have mainly focused on emerging markets and transition economies. Early contributions on guanxi in China (Bian, 1997;Li, 2007;Luo, 2000Luo, , 2011Yang, 1994) and blat in Russia (Ledeneva, 1998; Minbaeva & Muratbekova-Touron, 2013; Morris & Polese, 2015). The focus on these countries is understandable-although institutional co-evolution is, in principle, universal, this process is more visible in transitional and emerging economies. ...
Article
The paper unpacks the “black box” of informal institutions and theorize about the role of informal networks in channeling continuity and change in informal institutions. Specifically, we argue that when informal institutions are enacted by informal networks that are “relatively affective” and “relatively closed,” their persistence is higher than the persistence of informal institutions that are enacted by “relatively open” and “relatively instrumental” networks.
... Some regard strong ties and closed groups as more effective for social-capital acquisition (Bian & Ang, 1997;Coleman, 1990), while others believe that large, open networks are most beneficial (Burt, 2001;Granovetter, 1983). For example, in cross-cultural studies, scholars have been particularly focused on relatively open networks, such as guanxi in China (Bian, 1997;Li, 2007;Luo, 2011;Luo, 2000;Yang, 1994) and blat in Russia (Ledeneva, 1998). Kinshipbased networks have only recently started gaining some attention (Ford, 2018;Hotho, et al., 2018;Minbaeva & Muratbekova-Touron, 2013. ...
... Similar to some instrumental networks, guanxi historically "served many functions of the missing market economy" (Yang, 2018: 77). During the Maoist period, guanxi emerged in response to the state-run socialist society in which goods, jobs, housing, and other life opportunities were controlled by the state (Yang, 1994). The use of guanxi has not declined but its nature has changed. ...
... Although informal networks are present in all countries, studies of informal networks have mainly focused on emerging markets and transition economies. Early contributions on guanxi in China (Bian, 1997;Li, 2007;Luo, 2000Luo, , 2011Yang, 1994) and blat in Russia (Ledeneva, 1998; allowed context-rich examples of networking from other countries and regions to enter the discussion. This research has contributed to the development of phenomenon-based research on informal networks in other transitional and emerging economies (Horak et al., 2018;Giordano & Hayoz, 2013;Minbaeva & Muratbekova-Touron, 2013;Morris & Polese, 2015). ...
... This kind of work therefore fell into a form of affective labor, where relationships to the customer actually partially determined the value of the commodity, not as an aspect of the tactile object, but as a characteristic intrinsic to the relationship between salesperson and client. This trust through renqing was overlaid with two positive connotations by network marketers: first, through romanticizing the rural and imbuing rural citizens with a purity of intention in exchange relations (see Yang 1994); second, through a gender dynamic that attributed women with a particular capacity for creating warm and enduring relationships despite spatial rupture and isolation (cf. Casanova 2011;Fadzillah 2005). ...
... In China the absence of state guarantees, or the perceived absence of governmental ordering mechanisms, particularly in the areas of consumer rights and product standards, meant that personal guarantees continued to provide the basis of trust in economic transactions (see Kuever 2019). As such, guanxi accusations became explicitly negative in the governmental domain when they were linked to the state's responsibility for maintaining order and stability, beyond which lay the threat of "chaos" (luan) (see Yan 1996;Yang 1994). ...
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Banned in China between 1998 and 2005, the reemergence of network marketing allows rural young women to distribute a wide range of consumer products across uneven rural–urban landscapes. The rhizomic distribution channels of network marketing long confounded Chinese legal and regulatory governance based on workplaces embedded in particular locations, a problem compounded by the rise of e‐commerce in the last decade. As network marketers and their potential clients maneuvered spatial inequalities, gender hierarchies, and financial exclusion, they confronted the subversion of long‐term mutuality and sociality to short‐term transactional exchanges, a process partially inverted by the move from physical to virtual retail and its digital rating systems. As the Chinese state sought to establish, monitor, and guarantee trust in economic activities by delimiting predatory schemes, its initial targeting of network marketing companies has given way to regulating the sellers themselves. In contrast to contexts where network marketing forges enterprising subjectivities of neoliberalism, however, Chinese salespersons prioritized meeting aspirations of an imagined pastoral state and idealized social relations over business transactions. By championing that earning trust forms the ultimate measure of success, the discourse of network salespersons and their potential customers rings with the ways that e‐commerce platforms and digital bureaucracy attempt to measure, evaluate, and regulate the trustworthiness of Chinese citizens.
... In addition, guanxi can be utilised in everyday working relations. Yang (1994) describes a scenario when a worker presented a gift to their manager for a few days of authorised absence. Although the manager initially declined the gift, the employee gave the gift in the presence of all colleagues. ...
... Although the manager initially declined the gift, the employee gave the gift in the presence of all colleagues. In this situation, the manager honoured the employee's leave demand due to other colleagues witnessing the acceptance of the gift (Yang 1994). Hence, gift giving forms a social obligation and contract between two parties and is engrained in Chinese cultural values. ...
Article
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Corruption is a phenomenon that has received global attention from academics, policy makers and international donors. Corruption may be defined as the abuse of power for private gain. Activities include bribery, extortion, rent-seeking behaviour, cronyism, patronage, nepotism, embezzlement, graft and engagement with criminal enterprises. However, patronage, nepotism and gift giving are frequently viewed in many Asian and African cultures as acceptable practices that promote efficiency and smooth relationships. This article examines these practices in contexts including Afghanistan, Papua New Guinea, Russia, China and South Asia, discusses various rationales for these practices, and seeks to understand how these practices can be reconciled with international efforts to combat corruption. This article focuses on the implications with regard to the Anticorruption Protocol to the United Nations Convention against Corruption (APUNCAC) and the proposal to establish a body of United Nations (UN) inspectors to investigate charges of corruption and refer cases to dedicated domestic anticorruption courts. This article suggests that UN inspectors and international norms against corruption are not incompatible with traditional cultural practices. This article draws upon the experiences of Hong Kong and Singapore, where corruption was endemic, to demonstrate that local cultural norms can be rapidly changed when independent inspectors are established and receive support from institutions that are free from manipulation by domestic authorities.
... Gifts, Favors, and Banquets: The Art of Social Relationships in China, extensa discusión académica -y que permea el mundo de los negocios-se ha dado a la práctica del guanxi -traducida como relaciones sociales-que incluye "el intercambio de regalos, favores y banquetes: el cultivo de las relaciones personales que implican dependencia mutua y que está asociada a la fabricación de obligaciones y deudas" (Yang, 1994, p. 6), fuertemente asociada al confucianismo. Muy similar al concepto de capital social de Bourdieu, el guanxi actúa como un capital simbólico que permite alocar recursos a favor de quien lo cultiva y que se basa por tanto en relaciones interpersonales y conexiones que se utilizan como recurso (Fang, 1999;Redding, 2000;Gold et al., 2002;Ordóñez, 2004;Yang, 1994). ...
... La descripción precedente coincide con lo que se conoce como práctica del guanxi o creación de redes y favores a través de rituales como las comidas y el relacionamiento (Yang, 1994) y que ha sido objeto de discusiones académicas no sólo para el caso de estudio sino en distintas instancias y con diferentes actores, como se explicitó al inicio de este artículo. ...
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La cooperación en seguridad ha sido un área secundaria en la relación entre China y América Latina, después de los temas económicos y financieros. Sin embargo, las distintas formas de cooperación en seguridad se han ido desarrollando y expandiendo entre las dos partes. Estos desarrollos, si bien graduales y cautelosos, generaron disgusto en Estados Unidos, país que tradicionalmente mantuvo una posición de supremacía en lo que durante mucho tiempo consideraba su ‘patio trasero’. Considerando distintas formas de cooperación en seguridad —cooperación funcional, diplomacia de defensa, iniciativas de cooperación a largo plazo y la venta de armas— este capítulo proyecta una rivalidad entre Estados Unidos y China en el área en consideración. Al mismo tiempo, debido a la poca relevancia estratégica de la región, se argumentará que la probabilidad es baja que esta rivalidad se transforme en un conflicto donde los países sudamericanos se vieran presionados a elegir entre un lado y el otro. En este escenario, los países sudamericanos se verán beneficiados por la competencia entre las grandes potencias que cada una buscará tener el mayor número de socios internacionales siempre que los países regionales procuran tener una diplomacia hábil y proactiva, y no se vuelvan demasiado dependiente ni de Estados Unidos ni de China.
... Gifts, Favors, and Banquets: The Art of Social Relationships in China, extensa discusión académica -y que permea el mundo de los negocios-se ha dado a la práctica del guanxi -traducida como relaciones sociales-que incluye "el intercambio de regalos, favores y banquetes: el cultivo de las relaciones personales que implican dependencia mutua y que está asociada a la fabricación de obligaciones y deudas" (Yang, 1994, p. 6), fuertemente asociada al confucianismo. Muy similar al concepto de capital social de Bourdieu, el guanxi actúa como un capital simbólico que permite alocar recursos a favor de quien lo cultiva y que se basa por tanto en relaciones interpersonales y conexiones que se utilizan como recurso (Fang, 1999;Redding, 2000;Gold et al., 2002;Ordóñez, 2004;Yang, 1994). ...
... La descripción precedente coincide con lo que se conoce como práctica del guanxi o creación de redes y favores a través de rituales como las comidas y el relacionamiento (Yang, 1994) y que ha sido objeto de discusiones académicas no sólo para el caso de estudio sino en distintas instancias y con diferentes actores, como se explicitó al inicio de este artículo. ...
Chapter
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Este estudio analiza participación desde 2018 de los países de América Latina y el Caribe (ALC) en la Iniciativa de la Franja y la Ruta de China (BRI) iniciada en 2013. Adoptando una perspectiva constructivista, el análisis crítico de la literatura y de documentos oficiales muestran cómo la movilización de la retórica de la conectividad por parte del gobierno chino ha creado unas expectativas exageradas en los gobiernos de ALC cuyas economías están afectadas por un déficit estructural de infraestructuras. En realidad, el BRI no ha modificado substancial- mente las dinámicas anteriores presentes en las relaciones entre ALC y China, ni ha remediado los problemas relacionados con la dependencia de las economías de la región con la economía China. El examen de los mecanismos de participación en el BRI —memorándums de entendimiento y participación en foros oficiales— y de los factores que explican los diferentes grados de participación de los gobiernos LAC señalan que la iniciativa es en realidad una estrategia discursiva que da cobertura a una concepción de las relaciones internacionales no legalista y cuya esencia es el pragmatismo y la flexibilidad.
... If the board chair dismisses the CEO under pressure from shareholders, the relationship with the CEO is doomed and that may damage the chair's reputation in hometown networks where the norms of reciprocity are intense and institutionalized (Yang 1994). The potential costs of refusal can be high because others in hometown networks, especially those closely associated with the CEO who have direct influence on the board chair, may refuse something of value to the board chair (Hwang 1987). ...
... Research on sociology, economics, and management suggests that shared social attributes between actors create affinity and mutual attraction, and thereby facilitate favoritism (Damaraju and Makhija 2018;Guiso et al. 2009;Ruef et al. 2003). Given strong identification with their place of origin, Chinese often view hometown membership as an essential base of their self-identity and regard those who share their hometown more attractive (Jacobs 1982;Yang 1994). Shared roots between board chairs and CEOs can promote favoritism because it is easier to establish trust and solidarity between them than unconnected counterparts (Portes and Sensenbrenner 1993;Mollica et al. 2003). ...
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This paper provides a systematic analysis of how hometown ties, the most common and distinct bases for interpersonal ties to build upon in China, could influence corporate governance in Chinese corporations by focusing on its impact on CEO dismissals and corporate social responsibility. We find that hometown ties between CEOs and board chairs reduce the likelihood of CEO dismissals and that the negative relationship between firm performance and CEO dismissals is weaker for hometown-connected CEOs in locally administered state-owned enterprises, for inside CEOs, for firms located outside board chairs’ hometowns, and for firms operating in regions with low social trust. Moreover, we find consistent evidence that hometown ties affect Chinese firms’ engagement in corporate social responsibility. Our study highlights the important role of hometown ties in Chinese relationship-based corporate governance. It also advances a normative ethical assessment of hometown-based favoritism by highlighting its distinct dynamics and impacts on focal actors and the third parties in specific contexts of actions.
... Gifts, Favors, and Banquets: The Art of Social Relationships in China, extensa discusión académica -y que permea el mundo de los negocios-se ha dado a la práctica del guanxi -traducida como relaciones sociales-que incluye "el intercambio de regalos, favores y banquetes: el cultivo de las relaciones personales que implican dependencia mutua y que está asociada a la fabricación de obligaciones y deudas" (Yang, 1994, p. 6), fuertemente asociada al confucianismo. Muy similar al concepto de capital social de Bourdieu, el guanxi actúa como un capital simbólico que permite alocar recursos a favor de quien lo cultiva y que se basa por tanto en relaciones interpersonales y conexiones que se utilizan como recurso (Fang, 1999;Redding, 2000;Gold et al., 2002;Ordóñez, 2004;Yang, 1994). ...
... La descripción precedente coincide con lo que se conoce como práctica del guanxi o creación de redes y favores a través de rituales como las comidas y el relacionamiento (Yang, 1994) y que ha sido objeto de discusiones académicas no sólo para el caso de estudio sino en distintas instancias y con diferentes actores, como se explicitó al inicio de este artículo. ...
Chapter
Full-text available
El impresionante crecimiento económico de China en las últimas décadas y su relevancia en la escena mundial ha generado un amplio debate sobre su rol en el sistema internacional. Uno de los temas recurrentes en la literatura de relaciones internacionales ha sido el desafío que podría implicar el desarrollo de China para el orden liberal. Así, este capítulo analiza en profundidad la denominada crisis del orden internacional liberal, los cuestionamientos a las distintas dimensiones de este orden, cómo se ha posicionado China ante ellas y cuáles son las repercusiones para América Latina. Mediante un repaso de las principales iniciativas globales de Xi Jinping, del debate sobre el rol de China en la recesión democrática y de un análisis sobre los intereses centrales del gobierno de Beijing, este capítulo plantea que las predicciones de China como un desafiante al orden internacional existente son exageradas, al menos en ciertas dimensiones de este orden. Considerando la creciente competencia entre China y Estados Unidos, los cruces de acusaciones y la narrativa de guerra fría, los países de América Latina tendrán en los próximos años la difícil tarea de desarrollar políticas exteriores inteligentes para evitar quedar entrampados en esta disputa y a su vez colaborar en la construcción de un orden internacional más justo.
... Guanxi networks operate through provision of personal favours which raise a person's face state and in which failure to provide favour leads to a loss of face (Bian, 2019;Yang, 1994). ...
... Broken trust indicates not only the trustor's error of judgement concerning the transgressor but also the trustor's own poor judgement (Barbalet, 2019, p. 88). Misplaced trust may induce feelings of embarrassment, indignation, even shame or humiliation (Möllering, 2001 In guanxi relations a person who receives renqing (favour) or assistance from another acquires a sense of indebtedness to that person (Bian, 2019;Yang, 1994). The morally infused mutual exchange carried by renqing is the dynamic force behind guanxi. ...
Article
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In contractual relations, malfeasance is subject to sanction by formal institutions. Trust is widely held to be an informal basis of non-contractual exchange, in which breaches of trust lead to exposure, resulting in the perpetrator’s loss of reputation and likely exclusion from future exchanges. The present article, on the other hand, shows that breaches of trust may lead to neither of these outcomes. Interview data reported here show that individuals who experience violations of agreement may develop coping strategies that do not include exposure of betrayal, confronting the trust-breaker, or retaliation. A contribution of the present article is to show that these differences can be conceptualized as involving two possible strategies by the betrayed party: one involving retaliation, directed to public disclosure of the betrayer’s unreliability and possible expulsion from future exchanges; the other is self-management, in which betrayal leads to the betrayed modifying their expectations and behaviour. A second contribution is to show how trust may be sociologically understood as a continuous process, requiring renegotiation, rearticulation, and even redefinition, rather than as a resolved and final commitment.
... Confucian social theory proceeds from neither the society nor the individual, but from interpersonal relations. This point of departure leads logically to the emphasis on exchange behavior to concretize and nurture social relationships, and thus [to] the notions of reciprocity and empathy … With this concern for the proper and ethical conduct of social relationships and its stress on obligation and indebtedness, renqing discourse is the popularized version of the classical Confucian textual tradition (Yang, 1994: 70; see also Bian, 2019: 7-11;King, 1991: 74). Acknowledging that the term guanxi cannot be located within the Confucian classics, King (1991: 65-6) argues that the Confucian notion of lun, "relationship" or "order" (as in "social order") is a functional equivalent of the term guanxi. ...
Article
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Practices commonplace in mainland China, of individuals seeking favour from persons who control resources and, if successful, generating expectation of a return favour, characterized as guanxi, is widely held to be based on principles located in China's cultural traditions, including Confucianism. In these terms it is claimed that guanxi is based on certain connected moral principles, including bao (norm of reciprocity) and renqing (norm of human feelings), which can only be understood in terms of such cultural traditions. It is shown in the present article that claims regarding the classical roots of guanxi and related practices cannot be sustained and, further, that they are not required for the understanding or operation of guanxi. The origins of the concept of guanxi in late Qing and Republican China, and development of the term in post-1949 China, are outlined.
... With this information in mind, this study explored the roles that unique cultural-based traits of traditional Chinese relationships representing Guanxi played in the restaurant service failure setting. Generally, Guanxi is defined as a deep psychological commitment among Chinese people in an emphasis on mutual empathetic understanding, sharing of feelings and emotional identification rather than responsibilities or obligation [28,29]. The hospitality industry is largely human-resource-oriented and inevitably relies on various interpersonal and social interactions between customers and employees (or managers and owners), which can be affected by their culture and society [30,31]. ...
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Due to the COVID-19 pandemic, restaurants worldwide, including China, have been forced to protect public health by following food safety standards and adapting to the necessary social distancing practices. Accordingly, restaurant diners who are concerned about food safety and unsure of whether it is truly safe to dine out, put more importance on the entire stages of service consumption. Restaurants must make their best efforts to minimize service failures in their service provision process and outcomes. Given that customers from different cultures are reported to evaluate service quality differently, this study was designed to investigate what actions Chinese customers who encounter service failures would take under the influence of Guanxi. Guanxi represents Chinese attitudes towards long-term individual and business relationships and ultimately involves moral obligations and mutual favors. Analyzing our structural equation model using 439 responses obtained from Chinese diners, this study determined that Chinese consumers would react differently in the service process failures and outcome failures in terms of negative word-of-mouth, direct complaints, switching intention, and revisit intention. More importantly, this study confirmed the significant moderating effects of Guanxi within the proposed relationships. Based on the study’s findings, useful implications are provided for academics and practitioners regarding sustained restaurant businesses.
... It incurs through reciprocal social obligations and the solicitation of special favors in each interaction between the participating parties. What has been transacted entails both material (gifts), economic (money and information resources), and symbolic capitals (reputation and face) (see Yang 1994). According to Lin et al., guanxi's most crucial feature is that it contains at least two parties in asymmetrical and unbalanced positions. ...
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Since the relational turn, scholars have combated methodological universalism, nationalism, and individualism in researching social-spatial transformations. Yet, when leaving the gaps between the traveling and local epistemic assumptions unattended, engaging relational spatial theories in empirical research may still reproduce established theoretical claims. Following the sociology of knowledge tradition and taking Critical Realism as a meta-theoretical framework, Xiaoxue Gao takes relational spatial theories as traveling conceptual knowledge and develops meaningful and context-sensitive ways of engaging them in studying the complex urban phenomenon in China. She offers conceptual elucidations and methodological roadmaps, which leap productively from employing plural causal hypotheses to generating effect-based explanations for locally observable events. They are exemplified by manifold interrogations of Beijing's Artworld as a conjuncture of particular events.
... As suggested by numerous scholars focused on guanxi-Chinese networks and connections (e.g. Fei 1992; Gold et al. 2004;Yang 1994;Zheng 1986), Joey is one of many Chinese businesspeople who find Chinese networks helpful in business settings during the early stages of living in Thailand (Aranya Siriphon 2019: 271-290). However, unlike the literature on Chinese networks formed during the previous wave of Chinese migration which were based on local cultural traditions, Joey forged her Chinese connections through the new Chinese diaspora by utilizing her Chinese network to overcome the business constraints she encountered in Thailand in the beginning. ...
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This article explores recent waves of Chinese mobility demonstrated by new Chinese emigrants working for private Chinese companies conducting transnational business in Thailand in general and Chiang Mai Province in particular. We use two case studies of international education centres and real estate for senior care businesses in Chiang Mai to discuss the flexibility of Chinese capitalism and argue that deploying intrapreneurs and cultivating entrepreneurial value for employees, professionals and co-partners in pursuit of transnational business are some of the more flexible strategies that China’s private companies have employed in response to their new business lines and emerging market demand from both China and other parts of the globe. However, while the Chinese and Thai states have played an important role in facilitating and regulating business conducted in Thailand, transnational business is in an early stage, as demonstrated by the two case studies explored, and may not always proceed as expected.
... Guanxi, a crucial belief and social norm in the Chinese culture (Gold et al. 2002), refers to personal connections or networks that can be used via informal and interpersonal forms to obtain additional resources (Yang 1994). In Shenzhen, guanxi played a fundamental role in structuring developer's behavior. ...
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Continuous reform efforts in urban China have scaled back direct government intervention by introducing freer land market trials. Anecdotal evidence reveals, however, that the liberal approach has yielded little advantageous result in Shenzhen, where such experiments are pioneered. By building on new institutionalist concepts and analyzing primary and secondary data, this paper demonstrates that deficiencies of formal rules created a policy vacuum, while informal constraints increased project uncertainty. Understanding the interwoven formal and informal institutional deficiencies adds new insights to the literature in explaining project outcomes and urban policy innovations in China’s urban transformation.
... It incurs through reciprocal social obligations and the solicitation of special favors in each interaction between the participating parties. What has been transacted entails both material (gifts), economic (money and information resources), and symbolic capitals (reputation and face) (see Yang 1994). According to Lin et al., guanxi's most crucial feature is that it contains at least two parties in asymmetrical and unbalanced positions. ...
... In Thirty, in order to facilitate her daughter's retreat to her hometown, Manni's mother pulls strings to get her a sinecure in hometown. This deed, informed by the convention of acquaintance society known as guanxi in Chinese (Yang 1994), serves as a foil to the valorization of individual capability and efforts. ...
... The notion of IP as a cultural norm of gratitude is asserted to be particularly relevant to nations outside of the realm of Western culture and tradition [36][37][38]. As justified by Yang [39], incidents of IP "cannot be reduced to a modern western notion of corruption because the personalistic qualities of obligation, indebtedness, and reciprocity are just as important as transactions in material benefit." Thus, although large-scale corruption schemes in public services, and especially in healthcare, are commonly criticized, IP given to healthcare personnel are not necessarily considered to be the result of illegal corruption [40][41][42][43]. ...
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Background. The dominant view in the literature is that informal payments in healthcare universally are a negative phenomenon. By contrast, we theorize that the motivation healthcare users for making informal payments (IP) can be classified into three categories: (1) a cultural norm, (2) “grease the wheels” payments if users offered to pay to get better services, and (3) “sand the wheels” payments if users were asked to pay by healthcare personnel or felt that payments were expected. We further hypothesize that these three categories of payments are differently associated with a user’s outcomes, namely, satisfaction with healthcare, local and national government, satisfaction with life, and satisfaction with life of children in the future. Methods. We used microdata from the 2016 Life-in-Transition survey. Multivariate regression analysis is used to quantify relationships between these categories of payments and users’ outcomes. Results. Payments that are the result of cultural norms are associated with better outcomes. On the contrary, “sand the wheel” payments are associated with worse outcomes. We find no association between making “grease the wheels” payments and outcomes. Conclusions. This is the first paper which evaluates association between three different categories of informal payments with a wide range of users’ outcomes on a diverse sample of countries. Focusing on informal payments in general, rather than explicitly examining specific motivations, obscures the true outcomes of making IP. It is important to distinguish between three different motivations for informal payment, namely, cultural norms, “grease the wheels,” and “sand the wheels” since they have varying associations with user outcomes. From a policy making standpoint, variation in the links between different motivations for making IP and measures of satisfaction suggest that decision-makers should put their primary focus on situations where IP are explicitly asked for or are implied by the situation and that they should differentiate this from cases of gratitude payments. If such measures are not implemented, then policy makers may unintentionally ban the behaviour that is linked with increased satisfaction with healthcare, government, and life (i.e., paying gratitude). 1. Background IP is defined as a direct contribution in cash or gifts that is in addition to any formally required contributions and which are made by users to healthcare personnel or others acting on their behalf [1, 2]. Since such payments are made out of the counter and under the table, they are not part of formal healthcare expenditures and can be made in the form of cash such as small tips and large sums of money, or through various types of gifts such as flowers and sweets, and before or after receiving services [3]. IP is a subsection of a wider category of out-of-pocket payments [4]. Thus, out-of-pocket payments represent the amount of IP and legitimate legal fees paid in the healthcare sector taken together. Legitimate fees may include copayments for compulsory and voluntary health insurance schemes and payments for healthcare services which are not covered by compulsory and voluntary health insurance schemes. Various estimates show that IP represents the lion’s share of out-of-pocket payments [5]. For instance, the share of IP has reached 96% in Pakistan [6] and 74% in Azerbaijan [7]. Even in EU and OECD countries, incidents of IP are high, reaching 35% in Poland, 41% in Lithuania, and 17% in the Czech Republic and Slovakia [7]. From the standpoint of health policy and planning, such a large share of IP underlines a shift in healthcare funding from a solidarity approach that is based on budget-financed or insurance-financed schemes, to an individualistic approach where consumers are expected to bear the main responsibility for healthcare costs [8, 9]. Against this background, the literature highlights a lack of studies on association between different motivations for IP and user outcomes and points out that the current literature tends to evaluate overall effect of IP without considering different motivations for making IP [10, 11]. With the above evidence in mind, we theorize that the motivations for making could be grouped into three broad categories, namely, “cultural norm,” “grease the wheels,” and “sand the wheels.” We further theorize that the direction of association between IP and satisfaction is not universal and depends on the specific motivation for making IP. More specifically, we hypothesize that “cultural norm” and the “grease the wheels” conceptualization of IP may be associated with positive user outcomes, while the “sand the wheels” conceptualization will have an opposite association. To test these hypotheses, we separately analyze the effect of each of the above-discussed theoretical motivations of IP on user well-being. This approach allows us to shed light on differences in the association between the various motivations for making IP with a wide range of users’ outcomes. In this way, the study answered to the following three research questions: (1)How do each of these motivations influence satisfaction with public healthcare?(2)How do each of these motivations influence satisfaction with local and national governments?(3)How do each of these motivations influence satisfaction with one’s own life and expected satisfaction with the future life of one’s children? The unique contribution of this study is threefold. First, as far as we know, this is the first study which tests for plausible variation in the influence of the different conceptualizations of IP on users’ outcomes on a large sample of countries. Second, we test for the influence of IP on a wide range of outcomes including satisfaction with local and national governments and satisfaction with one’s own life and expected satisfaction with the future life of one’s children. Finally, we focused on postcommunist countries where incidents of IP are high and have a prolonged history. Historically, under the Semashko system, the state in the communist countries assumes the primary responsibility to provide universal healthcare to the citizens free at the point of utilization [12]. However, considerable shortage in the available public funding together with the nonexistence of official and legitimate mechanisms for engaging private healthcare expenditures led to widespread inequalities in access in the 1970s and IP became an important factor in ensuring access to rationed public healthcare since 1970s [13, 14]. The role of IP in providing access to public healthcare further grew through 1980 as postcommunist countries were not able to sufficiently increase public finding for healthcare and IP became widespread in forms of cash and small gifts, for instance, liquors, cigarettes, and perfume [15–17]. Collapse of communist economic system in the 1990s increased the spread of IP since the profound and protracted political and economic crisis associated with transition from communist further reduced public funding for healthcare [18, 19]. To curb IP, postcommunist countries embraced the wide range of healthcare reforms and each postcommunist country has chosen their own way for reforms with at least four main models were utilized: (1) to introduce compulsory health insurance system, (2) to implement guaranteed benefit packages for specific types of healthcare services or for specific population groups (e.g., maternal healthcare and healthcare for internally displaced people), (3) to use some combination of both above-described approaches, and (4) to remain with a traditional model of healthcare financing where healthcare funding is paid from the general budget revenue [20–23]. The fully comparable data about current characteristics of the healthcare systems in postcommunist countries is hard to find, so Table 1 provides the available information from the Global Health Expenditure database by the WHO that is the most reputable source of cross-country comparison for healthcare [24]. Government schemes and compulsory contributory health care financing schemes Voluntary health care payment schemes Household out-of-pocket payment Albania 58 0 42 Armenia 18 1 81 Azerbaijan 29 0 71 Belarus 71 2 27 Bosnia and Herzegovina 71 0 29 Bulgaria 55 1 43 Croatia 83 7 11 Czech Republic 82 3 15 Estonia 76 2 23 Georgia 37 8 56 Hungary 68 4 28 Kazakhstan 60 5 36 Kyrgyzstan 42 0 57 Latvia 56 1 43 Lithuania 67 1 32 Mongolia 64 3 32 Poland 69 8 23 Romania 78 1 21 Russia 57 3 40 Serbia 58 2 40 Slovakia 81 1 18 Slovenia 73 15 12 Tajikistan 32 2 66 Ukraine 48 3 48 Uzbekistan 45 1 55 Data is from the WHO’s Global Health Expenditure database by WHO at https://apps.who.int/nha/database/Select/Indicators/en. Household out-of-pocket expenditures encompass informal payments (IP) and various legitimate fees, as detailed in Introduction.
... 25 Chan, Cheris Shun-ching 2009. 26 Hwang 1987Yang 1994;Yan 1996;Lin 2001. 27 Granovetter 1973. ...
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Thesis
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Chapter
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