The Dual Developmental State: Development Strategy and Institutional Arrangements for China's Transition (review)

In the introductory chapter to this volume, author Ming Xia outlines the theoretical framework that is used to analyze China's development strategy. The term "dual developmental state," devised for this study, is explained by the author to mean that the "Chinese developmental state is defined and sustained by both the legislative institution and local political institutions. There is a dual structure from the central to local levels, between the governments and the People's Congresses" (p. 3). "When a developmental central state coexists with local developmental states, [when] a developmental executive coexists with a developmental legislative system in China, a dual developmental state is formed" (p. 6).

Chapter 2 discusses the three paradigms of development models—the West, Eastern Europe (including the former Soviet Union), and East Asia—and two approaches to running the political and economic system, namely the American and the Japanese. Chapter 3 argues that China's political elite has adopted the East Asian development model because the transaction and transition costs are the lowest. Chapter 4 discusses the institutional arrangements at the central level that support the developmental state. Chapter 5 examines the expanded role of the National People's Congress (NPC) in the context of one-party rule. Chapter 6 discusses the role of the Provincial People's Congresses (PPCs) in the development process. Chapter 7 is a study of Shenzhen as a showcase of central-local interactive synergism. Chapter 8 summarizes the main arguments of the book and anticipates future consequences of policy decisions.

Besides relying on academic terminology such as "theories of institutionalism," "comparative transaction cost," and "transition cost," which appear to be converging on the concept of total efficiency, the author seems to be offering an ex post facto explanation of the success of China's political economy. However, in my view, the crucial issue posed by the book is whether or not the author argues convincingly that China's development strategy is a viable new paradigm for development theory.

According to the author, the classic model of development has two important institutional features: the suppression of local autonomy and the negligible impact of local legislatures. In comparing China's development with the model, the author argues that on the level of institutional arrangements China has deviated in these two important respects from other developing East Asian states (p. 3). The fundamental question is this: is China so different from the East Asian development model that China constitutes a new model? I feel that the answer is a resounding no.

In the literature on development, social scientists normally make a distinction between the East Asian model and the successful development strategy of the Japanese. Those who are interested in the latter can refer to Ezra Vogel's Japan as Number One: A Challenge to the United States—a best seller in the category of development literature in the early 1980s. Regarding development in East Asia, namely in South Korea, Taiwan, Hong Kong, and Singapore, a variety of explanations have been offered for their success. The Political Economy of East Asian Industrialism, edited by Frederic C. Deyo, Robert Wade's Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization, and Peter Berger and Michael Hsiao's In Search of an East Asian Development Model are three good introductions to the subject. In my view, the structural features of the East Asian development model, which could be described as an export-oriented industrialization strategy, can be summarized as follows. First, there is a ruling elite that is committed to economic development. Second, there are appropriate government policies and institutional arrange-ments, such as a preferential tax system that benefits foreign investors and a market economy that offers foreign investors maximum profit. Third, there is an authoritarian political system under which any opposition is often harshly crushed—for the simple reason that social and political stability are necessary...