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Series:   Elements in Chinese Economy and Governance

Elite Conflicts and the Path to Economic Decentralization

Published online by Cambridge University Press:  10 January 2025

Dong Zhang ,
Mingxing Liu  and
Victor Shih
Dong Zhang
Affiliation:
The Hong Kong University of Science and Technology
Mingxing Liu
Affiliation:
Peking University
Victor Shih
Affiliation:
University of California at San Diego

Summary

Why would a politically centralized state embark on the path of economic decentralization? This Element delves into the political origin of the puzzling economic decentralization in mainland China. The authors contend that the intra-elite conflicts between the authoritarian ruler and the ruling elites within the state prompted the ruler to pursue decentralization as a strategy to curb the influence wielded by the ruling elites. By examining the composition of the Chinese Communist Party's Central Committee, they find that the Cultural Revolution, fueled by elite conflicts, shifted the elite selectorate's composition from favoring central agencies to favoring local interests. Subsequent low turnover reinforced this shift, aligning elite incentives with decentralization policies and committing the Chinese leadership to a decentralized path in the 1980s. Additionally, Taiwan's economic liberalization under the Kuomintang's authoritarian rule provides further evidence of the link between ruling party elite composition and economic policy orientation.
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Keywords

economic decentralizationauthoritarian regimesruling partyelite politics
Type
Element
Information
Series: Elements in Chinese Economy and Governance
Online ISBN: 9781009544764
Publisher: Cambridge University Press
Print publication: 30 January 2025

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Elite Conflicts and the Path to Economic Decentralization
  • Dong Zhang, The Hong Kong University of Science and Technology, Mingxing Liu, Peking University, Victor Shih, University of California at San Diego
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Elite Conflicts and the Path to Economic Decentralization
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Elite Conflicts and the Path to Economic Decentralization
  • Dong Zhang, The Hong Kong University of Science and Technology, Mingxing Liu, Peking University, Victor Shih, University of California at San Diego
  • Online ISBN: 9781009544764
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