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An Institutional Analysis of Market Transition and Political Capital

David, Lucinda (2009)
Department of Economics
Abstract
In his 1989 seminal paper, Victor Nee developed the market transition theory (MTT), which argues that reforming socialist economies shift power from a redistributive government to direct producers. One of the most contentious predictions of the theory is that market expansion will induce a relative decline in the value of political capital. However, China’s transition to a socialist-market economy has progressed at different levels, varying across industries and sectors, due to partial reform measures. This paper argues that deficiencies in its institutional environment such as a weak property rights system, credit inaccessibility and bureaucratic inefficiencies, have led particular industries to continue to put a premium on political... (More)
In his 1989 seminal paper, Victor Nee developed the market transition theory (MTT), which argues that reforming socialist economies shift power from a redistributive government to direct producers. One of the most contentious predictions of the theory is that market expansion will induce a relative decline in the value of political capital. However, China’s transition to a socialist-market economy has progressed at different levels, varying across industries and sectors, due to partial reform measures. This paper argues that deficiencies in its institutional environment such as a weak property rights system, credit inaccessibility and bureaucratic inefficiencies, have led particular industries to continue to put a premium on political capital despite market coordination. This paper analyzes the partial reform environment in China and the market structure of its key industries, as shaped by the events of its transition and liberalization. Using the World Bank Investment Climate Survey for China in 2003 dataset, regressions are performed to test the MTT and evaluate the valuation of political capital in 14 different industries. (Less)
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author
David, Lucinda
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
institutions, Market Transition Theory, Chinese Industries, Political Capital, Economics, econometrics, economic theory, economic systems, economic policy, Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik
language
English
id
1848823
date added to LUP
2009-05-18 00:00:00
date last changed
2011-06-01 12:43:55
@misc{1848823,
  abstract     = {In his 1989 seminal paper, Victor Nee developed the market transition theory (MTT), which argues that reforming socialist economies shift power from a redistributive government to direct producers. One of the most contentious predictions of the theory is that market expansion will induce a relative decline in the value of political capital. However, China’s transition to a socialist-market economy has progressed at different levels, varying across industries and sectors, due to partial reform measures. This paper argues that deficiencies in its institutional environment such as a weak property rights system, credit inaccessibility and bureaucratic inefficiencies, have led particular industries to continue to put a premium on political capital despite market coordination. This paper analyzes the partial reform environment in China and the market structure of its key industries, as shaped by the events of its transition and liberalization. Using the World Bank Investment Climate Survey for China in 2003 dataset, regressions are performed to test the MTT and evaluate the valuation of political capital in 14 different industries.},
  author       = {David, Lucinda},
  keyword      = {institutions,Market Transition Theory,Chinese Industries,Political Capital,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {eng},
  note         = {Student Paper},
  title        = {An Institutional Analysis of Market Transition and Political Capital},
  year         = {2009},
}