Suchergebnisse

Do informal institutions, rules, and norms created and enforced by social groups promote good local governance in environments of weak democratic or bureaucratic institutions? This question is difficult to answer because of challenges in defining and measuring informal institutions and identifying their causal effects. In the article, we investigate the effect of lineage groups, one of the most important vehicles of informal institutions in rural China, on local public goods expenditure. Using a panel dataset of 220 Chinese villages from 1986 to 2005, we find that village leaders from the two largest family clans in a village increased local public investment considerably. This association is stronger when the clans appeared to be more cohesive. We also find that clans helped local leaders overcome the collective action problem of financing public goods, but there is little evidence suggesting that they held local leaders accountable.

AbstractThis paper develops a dynamic general equilibrium model and studies structural change in a small open economy with two tradable sectors, agriculture and manufacturing, and a non‐tradable sector, services. In addition to obtaining results for a falling employment share of agriculture and a rising share of services, we demonstrate analytically the hump‐shaped share of manufacturing by identifying two countervailing effects: the productivity effect and the Balassa–Samuelson effect. The first effect, arising from differential rates of productivity growth among sectors, increases the share of manufacturing; the second effect, together with low rates of substitution between products, enhances the service sector and eventually draws labour from the manufacturing sector. At the aggregate level, however, the economy maintains a constant rate of growth. We calibrate the model with data from South Korea and find that the calibration fits the country's historical path of structural change.

AbstractWe test five hypotheses regarding the causes of privatization in China by using firm‐level panel data collected in 11 cities in the period 1995–2001. We have found that privatization is positively linked with hardened firm budgets and the extent of market liberalization, but is constrained by excessive debts and worker redundancy. Firm efficiency and state‐owned enterprises' financial liabilities imposed on local governments are not factors of influence. These findings match the broad flow of events in China and highlight the role of market building in bringing about efficient institutional changes.