Reshaping the Danwei Welfare Economy

Abstract

In the pre-reform days, the danwei welfare economy was essentially a monolithic and closed system.¹ Benefits and services were provided by and distributed through the bureaucracy to its members. These were all paid for by the state, ‘passed directly to the state budget and [did] not represent a cost to enterprise management’ (Walder 1986: 43). There was little pressure on the enterprise to run these services efficiently and cost-effectively. Quality was generally poor and choice by users and consumers very limited. ‘It was a very inefficient system. There was a lot of waste. It was in a mess’ (Liu 1995: 135).