Abstract
Why did China’s modest reforms unleash an enormous boom? Three decades of socialist planning created vast untapped potential. China captured this potential by focusing on ‘big reforms’ linked to incentives, markets, prices, mobility, openness and competition. Advances in these areas created sufficient momentum to overcome the drag associated with remaining distortions and institutional shortcomings. China’s political economy, which incorporates substantial local autonomy, facilitated experimentation that repeatedly identified feasible reform paths. Because China’s political economy delivers undesirable outcomes along with rapid growth, and because China’s success is linked to unique historical circumstances, the beneficial outcomes associated with Chinese policies and institutions may be limited in time and space.
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Brandt, L., Rawski, T.G. (2018). Chinese Economic Reforms. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2484
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2484
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