Brakes on Chinese Development: Institutional Causes of a Growth Slowdown
Journal of Economic Issues, 2013, 47(3):pp599-622
ABSTRACT: China has enjoyed spectacular economic growth since the 1980s. Economic models based on production functions typically suggest that China’s rapid growth will continue at similarly high rates, but they ignore pressing structural and institutional constraints on its development. Among the problems identified in this paper, we point to an impending demographic shift that will greatly increase the number of economic dependents, the inadequate corporate legal foundation for indigenous private enterprise, and the discriminatory, defective and disruptive system of land tenure. These issues point to a pressing agenda of institutional reform to help China develop in future decades. Reforms have to concentrate on political structures, state efficiency, incentives to educate and train migrant workers, land tenure, and on private enterprise.