The meteoric rise of the Chinese economy in the past four decades has attracted enormous attention from and raises profound questions for social science researchers. However, the literature has so far failed to offer an analytical framework to explain the major stylized facts of China’s growth in transition. Building on the literature on new institutional economics, critical historical juncture and resource curse, I propose an integrated framework to reinterpret the Chinese development models in different periods since 1949. I argue that the initial small institutional differences between China and the Former Soviet Union, interacted with the 1972 critical juncture, facilitated China’s gradualist and relatively smooth market-oriented reform and at the same time ruined the chance for the adoption of a gradualist approach in Russia’s market transition. I will explain why after mid-1990s China started an investment-driven and export -oriented growth model that bears the birthmarks of a typical East Asian developmental state, the country’s performance in income disparity, environmental protection, social stability and land development has been very different. Even though the differences in initial conditions between China and other East Asian states are relatively small, the political and economic structure of China shaped by the second critical juncture of 1989 Tiananmen event has made China’s comprehensive economic reform toward a full-fledged market economy stalled in the middle and thus China began to diverge from the typical East Asian model since the mid-1990s. As an extreme version of the East Asian developmental state, China is very likely to fall into the mid-income trap after two decades of fast growth while most other East Asian states have leaped out of such traps. I conclude by proposing to reset the research agenda in social sciences on planned economy, economic transition as well as developmental state under a new theoretical framework that takes into account the roles of critical junctures interacting small initial differences in shaping the institutional divergence and the different performance outcomes across countries.
About the Speaker
Prof. Ran TAO is a professor in School of Economics and the Vice Dean of Hanqing School of Economics and Finance, at Renmin University of China based at Beijing. A specialist on Chinese economy, he has published about 50 articles on international economics, political science and sociological journals and over 50 articles on Chinese core social science journals. His research topics range from the political economy of China’s economic transition, land and household registration reform in China’s urbanization, urban redevelopment, to village election, local governance and public finance issues in China. His research has been funded by two National Science Foundation large grant programs and one National Social Science Large grant program.
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