Mary-Françoise Renard: As China faces a decreasing population growth rate, the social cost of its rapid economic growth is currently a major challenge. The first years of reform have been without losers. Now, the costs appear to be quite strong and they reach a wide range of societal aspects.
To approach this question, Knight reminds us of the crucial role of decentralization in China and the strategy of becoming a “developmental state.” The Chinese experience of reforms can be defined as Federalism Chinese style (Montinola, Qian, and Weingast 1996), with three main characteristics:
Political centralization and economic decentralization: To solve the principal-agent problem
Gradual reforms: To deal with the political opposition and continue patronage
Central government management of provincial leaders’ careers: to be sure of the governors’ loyalty
This institutional organization has been the pillar of the reform's implementation.
Considering the interest of the social impact of...