Decentralization Reform in Post-Mao China: A Framework of Choice

Abstract

This article presents an analytical framework that studies why a Leninist central government is willing to share its economic power with localities. From the choice theoretic perspective, it identifies different central leaders’ preferences, traces the exogenous factors in the larger political and economic environment that frame their choices, and examines the rationale of the actual policies that result from their choices as modified by the competing interests of other relevant factors. It argues that central decisionmakers choose different policies in accordance with their own interests through available institutional channels to deal with succession struggles and legitimacy crises. Decentralization in this sense is regarded as one of the strategies of state control in economic reforms. It maintains that exploration of how the Chinese elites attempt to maintain control over the economy and how Chinese economic policies enter into the power struggle is fundamental to an understanding of Chinese economic reforms. This framework highlights the center’s perspective of decentralization reforms.