Skip to main content

Government–Firm Collusion: A New Analytical Framework

  • Chapter
  • First Online:
Collusion, Local Governments and Development in China
  • 293 Accesses

Abstract

This chapter is to explain the China Model characterized with “high economic growth rate concomitant with high frequency of vicious accidents” by constructing a formal model of the local government–firm collusion.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 79.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 99.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 99.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Bai, Chong-En, Yingjuan Du, Zhigang Tao, Sarah Tong. “Local Protectionism and Regional Specialization: Evidence from China’s Industries”. Journal of International Economics. 2004, 63 (2): 397–417.

    Google Scholar 

  • Bardhan, Prana & Dilip Mookherjee. “Capture and Governance at Local and National Levels”. American Economic Review. 2000, 90 (2): 135–139.

    Google Scholar 

  • Bo, Zhiyue. “Economic Performance and Political Mobility: Chinese Provincial Leaders”. Journal of Contemporary China. 1996, 5 (12): 135–154.

    Google Scholar 

  • Bolton, Patric and Mathias Dewatripont. Contract Theory. Cambridge: MIT Press, 2005.

    Google Scholar 

  • Brandt, Loren and Thomas Rawski. China’s Great Economic Transformation. UK: Cambridge University Press. 2008.

    Google Scholar 

  • Cai, Hongbin, and Daniel Triesman. “State Corroding Federalism”. Journal of Public Economics. 2004, 88: 819–843.

    Google Scholar 

  • Chen, Ye, Hongbin Li and Li-An Zhou. “Relative Performance Evaluation and the Turnover of Provincial Leaders in China.” Economic Letters. 2005, 88: 421–425.

    Google Scholar 

  • Cheung, Steven. The Economic System of China. Hong Kong: Arcadia Press, 2008.

    Google Scholar 

  • Chow, Gregory and Kui-Wai Li. “China’s Economic Growth: 1952–2010”. Economic Development and Cultural Change. 2001, 51 (1): 247–256.

    Google Scholar 

  • Faure-Grimaud, Antoine. et al. “Transaction Costs of Collusion and Organizational Design”. USC Center for Law, Economics & Organization Research Paper No. C01–17, 2001.

    Google Scholar 

  • Faure-Grimaud, Antoine, et al. “Collusion, Delegation, and Supervision with Soft Information”. Review of Economic Studies. 2003, 70 (2): 253–280.

    Google Scholar 

  • Gordon, Roger. “An Optimal Taxation Approach to Fiscal Federalism”. Quarterly Journal of Economics. 1983, 98 (4): 567–586.

    Google Scholar 

  • Jin, Hehui, Yingyi Qian and Barry Weingast. “Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style.” Journal of Public Economics. 2005, 89 (9–10): 1719–1742.

    Google Scholar 

  • Kofman, Fred, and Jacques Lawarree. “Collusion in Hierarchical Agency”. Econometrica. 1993, 61: 629–656.

    Google Scholar 

  • Kofman, Fred and Jacques Lawarree. “On the Optimality of Allowing Collusion”. Journal of Public Economics. 1996, 61 (3): 383–407.

    Google Scholar 

  • Laffont, Jean-Jacques and David Martimort. “Collusion and Delegation”. Rand Journal of Economics. 1995, 29 (2): 280–305.

    Google Scholar 

  • Lambert-Mogiliansky, Ariane. “On the Optimality of Illegal Collusion in Contracts”. Review of Economic Design. 1998, 3: 303–328.

    Google Scholar 

  • Li, Hongbin and Li-An Zhou. “Political Turnover and Economic Performance: The Incentive Role of Personnel Control in China.” Journal of Public Economics. 2005, 89: 1743–1762.

    Google Scholar 

  • Lin, Justin Yifu and Zhiqiang Liu. “Fiscal Decentralization and Economic Growth in China”. Economic Development and Cultural Change. 2000, 49 (1): 1–21.

    Google Scholar 

  • Maskin, Eric, Yingyi Qian and Chenggang Xu. “Incentives, Scale Economies and Organization Forms”. Review of Economic Studies. 2000, 67 (2): 359–378.

    Google Scholar 

  • Nie, Huihua. “A New Perspective of Reducing Safety Accidents”. Globe. 2005 (1): 11–12. 聂辉华. 减少生产安全事故要有新思维. 环球. 2005 (1): 11–12.

    Google Scholar 

  • Nie, Huihua. “The Impact of Cancellation of Agricultural Tax on Township Governments’ Behaviors: An Analytical Framework of Entrusted Agency”. The Journal of World Economy. 2006, 8: 71–78. 聂辉华, 取消农业税对乡镇政府不同行为的影响: 一个多任务委托代理分析框架. 世界经济, 2006, 8: 71–78.

    Google Scholar 

  • Nie, Huihua and Jinbo Li. “Collusion and Economic Growth”. China Economic Quarterly. 2006, 6 (1): 75–90. 聂辉华, 李金波. 政企合谋与经济发展. 经济学 (季刊). 2006, 6(1): 75–90.

    Google Scholar 

  • Nie, Huihua and Jinbo Li. “Collusion and Growth: A New Perspective on China Model”. Economic and Political Studies. 2013, 1 (2): 18–39.

    Google Scholar 

  • Oates, Wallace and Robert Schwab. “Economic Competition Among Jurisdictions: Efficiency Enhancing or Distortion Inducing”. Journal of Public Economics. 1988, 35: 333–354.

    Google Scholar 

  • Oi, Jean. (1992) “Fiscal Reform and the Economic Foundations of Local State Corporatism in China”. World Politics. 1992, 45 (1): 99–126.

    Google Scholar 

  • Opper Sonja, Stefan Brehm. “Economic Performance and Networks: Political Careers in China’s M-Form State”. Working paper, 2007.

    Google Scholar 

  • Qian, Yingyi and Barry R. Weingast. “China’s Transition to Markets: Market-Preserving Federalism, Chinese Style”. Journal of Policy Reform. 1996, 1 (2): 149–185.

    Google Scholar 

  • Qian, Yingyi and Chenggang Xu. “Why China’s Economic Reforms Differ: the M-form Hierarchy and Entry/expansion of the Non-state Sector”. Economic Transition. 1993, 1 (2): 135–170.

    Google Scholar 

  • Shen, Liren and Yuanchen Dai. The Formation of China’s Fragmented Economy and its Disadvantages and Roots. Economic Research Journal. 1990, (3): 12–19. 沈立人, 戴园晨. 我国诸侯经济的形成及其弊端和根源. 经济研究. 1990, (3): 12–19.

    Google Scholar 

  • Suzuki, Yutaka. “Collusion in Organizations and Management of Conflicts through Job Design and Authority Delegation”. Journal of Economic Research. 2007, 12 (2): 203–241.

    Google Scholar 

  • Tao, Ran, et al. “Can Economic Growth Benefit Political Promotion? A Logic Challenge Against Promotion Tournament Theory and a Provincial-Level Evaluation”. Management World. 2010‚ (12): 13–26. 陶然等, 经济增长能带来晋升吗?—对晋升锦标赛理论的逻辑挑战与省级实证评估. 管理世界. 2012, (12): 13–26.

    Google Scholar 

  • Tirole, Jean. “Collusion and Theory of Organizations”, in Jean-Jacques Laffont, eds. Advances in Economic Theory: Proceedings of the Sixth World Congress of the Econometric Society. Cambridge: Cambridge University Press. 1992.

    Google Scholar 

  • Tirole, Jean. “Hierarchies and Bureaucracies: On the Role of Collusion in Organizations”. Journal of Law, Economics, and Organization. 1986, 2 (2): 181–214.

    Google Scholar 

  • Weingast, R. Barry. “The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development”. Journal of Law, Economics and Organization. 1995, 1 (1): 1–31.

    Google Scholar 

  • Yang, Qijing, and Huihua Nie. “Market-Preserving Federalism and Criticism Thereon”. Economic Research Journal. 2008‚ (3): 99–114. 杨其静, 聂辉华. 保护市场的联邦主义及其批判. 经济研究, 2008‚ (3): 99–114.

    Google Scholar 

  • Yao, Yang. “Is There Really a China Model?” Reprinted Journal Materials of Renmin University, “Socialism Economic Theory and Practice”. 2008 (10). 姚洋. 是否存在一个中国模式?人大复印报刊资料 “社会主义经济理论与实践”, 2008 (10).

    Google Scholar 

  • Young, Alwayn. “The Razor’s Edge: Distortions and Incremental Reform in the People’s Republic of China”. Quarterly Journal of Economics. 2000, 115 (4): 1091–1135.

    Google Scholar 

  • Zhang, Weiying and Shuhe Li. “Regional Competitions and Privatization of State-Run Enterprises”. Economic Research Journal. 1998, (12:) 13–22. 张维迎, 栗树和. 地区间竞争与中国国有企业的民营化. 经济研究. 1998, (12:) 13–22.

    Google Scholar 

  • Zhang, Yan. Yongqin Wang, Yuan Zhang, Zhaochen, and Ming Lu. “China’s Development Model: the Costs and Benefits of the Decentralization Approach to Transition”. China Economist. 2007, 4: 22–33.

    Google Scholar 

  • Zhou, Li-An. “Incentives and Cooperation Among Governmental Officials in Promotion Game: An Analysis of the Underlying Reason for Localism and Repeated Constructions in China.” Economic Research Journal. 2004, (6): 33–40. 周黎安. 晋升博弈中政府官员的激励与合作―兼论我国地方保护主义和重复建设问题长期存在的原因. 经济研究. 2004, (6): 33–40.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

Copyright information

© 2017 The Author(s)

About this chapter

Cite this chapter

Nie, H. (2017). Government–Firm Collusion: A New Analytical Framework. In: Collusion, Local Governments and Development in China. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-5059-6_2

Download citation

  • DOI: https://doi.org/10.1007/978-981-10-5059-6_2

  • Published:

  • Publisher Name: Palgrave Macmillan, Singapore

  • Print ISBN: 978-981-10-5058-9

  • Online ISBN: 978-981-10-5059-6

  • eBook Packages: Social SciencesSocial Sciences (R0)

Publish with us

Policies and ethics