Abstract
This article explores the different and sometimes conflicting explanations of the success of the collective enterprises (town–village-enterprise) in China during the first phase of transition (1979–1995). It is argued that explanations, relying on cultural variables are not sustainable and this for two reasons. First, the importance of the collective enterprise is shrinking while the private sector is clearly on the rise. Second, other factors, referring to characteristics of the local and central political, administrative and economic environment, in which the Chinese enterprise has to (had to?) operate, provide for a sufficient explanation of the peculiar structure of the Chinese collective enterprises. These enterprises are seen as the result of ‹bureau-preneurship’ because local bureaucrats were integrated in their management in order to pre-empt predatory behaviour and to facilitate the relationships with the central institutions. The article contributes to the property rights’ theory of the firm as it analyses an empirically very important case in which firms with unclear property rights and structures, apparently not conducive for incentives, might still be the most efficient option.
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The paper has been presented in a preliminary draft at the EALE-conference in Ljubljana in September 2005. I thank the referee and the discussants for their helpful comments. Thanks also to the students of the EMLE-class 2005-2006 for their comments and suggestions during the Work Session of CASLE.
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Bouckaert, B.R.A. Bureaupreneurs in China: we did it our way. Eur J Law Econ 23, 169–195 (2007). https://doi.org/10.1007/s10657-007-9007-9
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DOI: https://doi.org/10.1007/s10657-007-9007-9