The Role of Local Government in China’s Transitional Economy: Focusing on the Post-Mao Reform Period

Since the economic reform was launched in China in 1978, the country’s remarkable growth and success have received much attention around the world. Along with this remarkable economic growth, the role of the state, especially that of local governments, in the reform process has been the subject of heated debate. There are two salient perspectives in explaining the role of local governments in the Post-Mao reform period. One is the market transition theory, which have expected local governments to be resistant to changes that threaten their bureaucratic routines or roles and to obstruct the economic reform. The other is local state corporatism, which expects state’s willing to adapt to marketization and expects it to play a pivotal role in local economy. In this paper, I will support the assertion that local corporatism is a better fit for China by analyzing China’s economic dynamics and intuitional consequences. First, I will give a description of market transition theory, and examine its strengths and weakness. Then, I analysis a discussion of local state corporatism and prove that it was a more sensible fit for China.