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Trapped into Collusion: The Under-Institutionalized Taxation System and Local Business–State Relations in China

  • Changdong Zhang
Chapter
Part of the International Political Economy Series book series (IPES)

Abstract

Are the local state–business relationships collusive or collaborative? Using the method of agreement to study several regions, this chapter argues that the under-institutionalized taxation institution plays an important role in making the local state–business relationships more collusive than collaborative in China. The taxation administration is under-institutionalized; it imposes high nominal tax rates, gives tax officers broad discretional power, and uses a target system. This lack of a-rule-by-law tax administration deprives the local government of autonomy and weakens private enterprises’ bargaining power, which results in the collusive nature of local state–business relationships. By analyzing the effects of taxation politics, this chapter contributes to the literature on state business and on taxation politics in China, as well as contributes to the theory of general state–business relationships.

Keywords

Under-institutionalized taxation system Taxation politics state–business relationships Collusion 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Changdong Zhang
    • 1
  1. 1.School of GovernmentPeking UniversityBeijingChina

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