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Rural China Takes Off Institutional Foundations of Economic Reform. By Jean C. 0i. Berkeley: University of California Press, 1999. 253p. $35.00 cloth, $17.95 paper.
Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market. By Dorothy J. Solinger. Berkeley: University of California Press, 1999. 444p. $50.00 cloth, $19.95 paper.
For the past two decades, scholarly attention on China has grown steadily as that vast country has reformed its planned economy while sustaining a stellar growth record. Not surprisingly, the Chinese experience has become highly significant for generating and assessing models of economic reform.
Rural China seeks to explain the sharp rise in output produced by rural enterprises, primarily in the 1980s, when publicly owned township and village enterprises led the upsurge in rural industrialization. Building on her 1992 article in World Politics and other writings, Oi concludes: "The rapid takeoff of China's rural industry was the result primarily of local government entrepreneurship" (p. 2). 0i draws on agency theory to analyze "the more successful cases" of industrialization (p. 200). She notes in chapter 2 that at the turn of the 1980s the institutional environment for rural development was transformed. Decollectivization of agriculture sharply reduced the income that local cadres could generate from agriculture, but fiscal reforms in the form of revenue contracts not only tightened the budget constraints of local governments but also offered local authorities rights to the revenue stream and limited central government capriciousness. The conjunction of these two institutional changes provided powerful incentives for local officials at the county, township, and village levels to promote industrial development. Private sector expansion was restricted for political and ideological reasons, and local officials gave preference to collective enterprises, especially the township and village enterprises.
0i recognizes that the revenue imperative was a necessary but not a sufficient condition for rural industrial growth. In chapter 4 she argues that it was the institutions inherited from the Maoist era that provided local governments with the political capacity and policy instruments to foster the rapid growth of rural industry (pp. 95-6). She believes that this legacy, refitted for the reform era, is the foundation for a distinctive form of state-led growth. She calls it local state corporatism and claims that it is a...