Law and Economics with Chinese Characteristics: Institutions for Promoting Development in the Twenty-First Century (Initiative for Policy Dialogue)

Policymakers and economists largely agree that "rule of law" and property rights are essential for a sound economic policy, particularly for most developing countries. But it is becoming increasingly apparent that transplanting legal frameworks from one society to another doesn't work--even though neoliberal orthodoxy has held that it should. China's economic development offers a backdrop for developing alternative viewpoints on these issues. In this book, economists, academics, and policymakers wade straight into the discussion, using China as a concrete reference point. The volume is the result of a series of dialogues among academics and policymakers from China and around the world. While the authors are not at all of one mind on many things, they do share the conviction that China is now entering a critical phase in its economic development and in its transition to a distinctly Chinese market economy. The essays cover a broad range of subjects that have been particularly relevant in China's growth, from property rights to social rights, corporate rights, institutions, intellectual property, and justice. Although the work thoroughly analyzes the best regulatory and institutional frameworks for China's evolving economic and political strategy, its ultimate goal is bigger: it seeks to aid policymakers in both developing and developed countries to create--or in the latter case reform--institutional and regulatory frameworks to achieve equitable and sustained development. Cover 1 Contents 6 List of Figures 8 List of Tables 10 Notes on Contributors 11 Introduction 16 I. Conceptual Foundations 32 1. Law and Development Economics: Toward a New Alliance 34 2. Creating the Institutional Foundations for a Market Economy 86 3. Analyzing Legal Formality and Informality: Lessons from the Land Titling and Microfinance Programs 127 II. Toward Law and Development Policies with Chinese Characteristics 164 Section introduction 164 4. The Economics Behind Law in a Market Economy: Alternatives to the Neoliberal Orthodoxy 168 5. Some Caution about Property Rights as a Recipe for Economic Development 202 6. Rural Land Rights in China 229 7. The Role of Property Rights in Chinese Economic Transition 251 8. Institutional Design for China’s Innovation System: Implications for Intellectual Property Rights 262 9. The Evolution of China’s IPR System and its Impact on the Innovative Performance of MNCs and Local Firms in China 293 10. Property and Intellectual Property Exchanges (PIPEs) in China since the 1990s: An Analysis of the Emergence and Regulatory Resolution of PIPEs and Their Comparative Advantage Over OTC Markets 330 11. The China Aviation Oil Episode: Law and Development in China and Singapore 344 12. Legal Deterrence: The Foundation of Corporate Governance—Evidence from China 373 13. Generosity and Participation: Variations in Urban China’s Minimum Livelihood Guarantee Policy 408 14. The Intergenerational Content of Social Spending: Health Care and Sustainable Growth in China 438 15. The Hukou Reform and Unification of Rural–Urban Social Welfare 456 III. Institutional Foundations for the Chinese Market Economy: The State 470 Section introduction 470 16. Deregulation, Decentralization, and China’s Growth in Transition 482 17. From Industrialization to Urbanization: The Social Consequences of Changing Fiscal Incentives on Local Governments’ Behavior 506 18. China’s Network Justice 525 19. China’s Courts: Restricted Reform 583 Index 604 A 604 B 605 C 605 D 609 E 610 F 612 G 613 H 613 I 614 J 616 K 617 L 617 M 619 N 620 O 621 P 621 Q 624 R 625 S 626 T 628 U 629 V 629 W 630 X 630 Y 630 Z 630 Policymakers and economists largely agree that'rule of law'and property rights are essential for a sound economic policy, particularly for most developing countries. But it is becoming increasingly apparent that transplanting legal frameworks from one society to another doesn't work - even though neoliberal orthodoxy has held that it should. China's economic development offers a backdrop for developing alternative viewpoints on these issues. In this book, economists, academics, and policymakers wade straight into the discussion, using China as a concrete reference point. The volume is the result of a series of dialogues among academics and policymakers from China and around the world. While the authors are not at all of one mind on many things, they do share the conviction that China is now entering a critical phase in its economic development and in its transition to a distinctly Chinese market economy. The essays cover a broad range of subjects that have been particularly relevant in China's growth, from property rights to social rights, corporate rights, institutions, intellectual property, and justice. Although the work thoroughly analyzes the best regulatory and institutional frameworks for China's evolving economic and political strategy, its ultimate goal is bigger: it seeks to aid policymakers in both developing and developed countries to create - or in the latter case reform - institutional and regulatory frameworks to achieve equitable and sustained development. This volume examines the role of law in economic development. It focuses on China and analyzes how the development policies and institutional characteristics of the emerging Chinese market economy might aid policymakers, in developed and developing countries, to create and reform frameworks to achieve equitable and sustained development.