The political economy of Chinese environmental protection: Lessons of the Mao and Deng years

Despite the very different policies, structures and rhetoric associated with the Mao and Deng years, environmental outcomes for China were depressingly similar. Neither the political economy of command under Mao Zedong nor the more market-based political economy under Deng Xiaoping adequately came to terms with the problems of environmental pollution and degradation, to the extent that many observers, both inside and outside China, argue that the current state of the natural environment-the legacy of those years-is so parlous as to threaten future material advance. This article compares and contrasts environmental protection under the two regimes, draws out lessons for the current administration of China, and specifically argues that while the market-based reforms begun under Deng Xiaoping have delivered fast rates of economic growth, it is important to recognise that recent well-meaning policies to encourage environmental protection are put at a discount unless the threats to the environment of increasing market liberalisation are faced.     

To return or not to return? Politics vs. economics in China's brain drain

This study, based on 273 face-to-face interviews with students, scholars, and former residents of China in the United States in 1993, uses both qualitative and quantitative methods to explain people's views about returning to China. Although less than 9 percent of interviewees had concrete plans to return, over 32 percent were positively disposed to returning in the future. Key background variables that affect that decision are people’s age, sex, social background in China, and their views about returning when they first left China. Concern about children’s future was not significant, but having a wife abroad greatly increased the desire to stay abroad. Why people chose not to return varied significantly between people with children and those who didn't. Even four years after the Tiananmen crackdown, concerns about political instability, lack of political freedom, and a lack of trust that the government would let people who returned leave again were significant reasons for not returning. But economic factors—better U.S. housing and incomes—as well as professional concerns about lack of job or career mobility in China and a poor work environment there were equally important. Given the weight attributed to economic factors and political stability, if China weathers Deng Xiaoping’s succession and the economy continues to grow, significant numbers of Chinese may return. David Zweig is Associate Professor, Division of Social Science, Hong Kong University of Science and Technology. He is the author ofFreeing China’s Farmers: Rural Restructuring in the Deng Era (forthcoming),Agrarian Radicalism in China, 1968–1981 (1989), co-author ofChina’s Brain Drain to the United States: The Views of Students and Scholars in the 1990s (1995), and co-editor ofChina’s Search for Democracy: The Student and Mass Movement of 1989 (1992) andNew Perspectives on China’s Cultural Revolution (1991). He writes about China’s rural political economy, transnational relations, and domestic politics. He is currently completing a book on the impact of China’s open policy and transnational relations on urban development, rural industry, universities, and recipients of foreign aid.     

The Anti-Politics of Development: donor agencies and the political economy of governance

This article discusses the attempt undertaken by several development aid agencies since the turn of the century to integrate political economy assessments into their decision making on development assistance. The article discusses three such attempts: the Drivers of Change adopted by the UK's Department for International Development, the Strategic Governance and Corruption Analysis (sgaca) developed by the Dutch Directorate General for International Cooperation and the new thinking on political economy analysis, policy reform and political risk advanced by the World Bank. On the basis of a political-economic interpretation of development agencies, two main factors are found to hinder the successful application of political economy assessment. In the first place, the agencies' professional outlook leads them to see development in primarily technical terms. In the second place, the nature of incentives for development professionals leads them to resist the implementation of political economy analyses.     

“Crossing the River by Feeling the Stones”: Vietnam's Experiment with Block Grant Budgeting

“We are crossing the river by feeling the stones.”

— attributed to Deng Xiaoping on economic reforms in China

Abstract

In December 1999, Vietnam's leaders granted Ho Chi Minh City (HCMC) powers to pilot a remarkable budget management reform. This small-scale but radical experiment, launched in January 2000, has involved allowing the provincial finance department to approve and control budgets for 10 pilot spending units as “block grants” or “lump sums.” This review of the first two years of the HCMC block grants experiment suggests that such mechanisms may be useful in the developing country context. It also explores why Vietnam's decision to continue with pilots on a larger scale, rather than move immediately to full-scale rollout, may be an optimal reform implementation approach.     

The Russian virtual economy turning real: Institutional change in the Arkhangel'sk forest sector

The article reports on an attempt to assess recent developments of the Russian ‘virtual economy’, a system that, some have argued, represents an alternative form of economic interaction to the modern market economy. In the virtual economy enterprises are engaged in informal non-market transactions with other enterprises and the public sector in accordance with rules that are alien to a market economy. Structural and behavioural changes that have taken place in the Russian economy after 1998 are studied with the help of official data and two surveys (from 1998 and 2005) of 15 forest sector enterprises in Arkhangel'sk Oblast’, a region in Russia's north-west with a largely forest-based economy. The outcome of the assessment indicates that the virtual economy is contracting in the Arkhangel'sk forest sector as well as in Russia at large, and that it will eventually disappear altogether, even if it is likely to exert a profound influence on the behaviour of Russian enterprises for some time yet.     

Discourses on Poverty: emerging perspectives on a caring economy

In The Real Wealth of Nations, Eisler proposes a holistic view of the economy, which would include the caring sectors—the household, unpaid community work and the environment—as an alternative to market-oriented economic models that have proven ineffective in dealing with the problems facing our local and global communities. Her inclusion of language change as part of a strategy for economic transformation implicitly recognises the socially constitutive function of discourse, a notion put forth by critical linguists. Based on these economic and linguistic perspectives, this article reports on a study that examined the social knowledge about poverty constructed through selected discourses to determine whether they communicate a narrow or holistic view of the economy. It proposes that economic planning for poverty reduction build upon the process of language change towards a caring economy as revealed by the study.     

Embedded mercantilism and open regionalism: The crisis of a regional political project

This paper advances the argument that moves towards regional integration need to be understood as 'regional governance projects' undertaken by domestic actors and coalitions. Regional political projects--such as open regionalism--have roots in domestic structures, and it is this which defines the broad configuration of the regional political economy. On the basis of this framework the paper suggests, first, that the strategy of open regionalism was contingent on a particular configuration of power and interests in the domestic and external economy (embedded mercantilism). Second, this system of embedded mercantilism depended on a set of domestic coalitions between tradeable and non-tradeable sectors of the economy. The non-tradeable sector in Southeast Asia was entrenched within a particular system of political patronage. Third, the Asian crisis and other structural changes in the international economy have made these domestic coalitions less sustainable, thereby creating opportunities for new forms of regional governance projects.     

European Media Coverage of Argentina’s Debt Default and Recovery: distorting the lessons for Europe

In 2001 Argentina defaulted on its debts and then devalued its currency by abandoning the peso–dollar peg. The economy rebounded and has grown relatively strongly since then. This paper uses a critical political economy approach to first show that the Argentinian strategy finds support in the literature examining the effects of sovereign debt default, currency devaluation and fiscal consolidation on economic growth. Argentina is thus relevant to Europe’s ongoing crisis. The article then investigates European media coverage of the Argentinian experience through an examination of major newspapers’ stories between 2008 and 2013. It argues that the media have distorted the lessons of the Argentinian recovery by focusing on the negative consequences of default rather than its benefits; by emphasising the role of rising commodity export prices over domestic policy decisions in stimulating the economy; by opposing some aspects of government intervention in the economy even if the latter played a beneficial role; and by exaggerating the negative consequences of inflation. This distorted coverage is explained through reference to the media’s ideological role in the implementation of austerity policies in Europe.     

Rebels-Turned-Narcos? The FARC-EP’s Political Involvement in Colombia’s Cocaine Economy

Abstract

According to the ‘rebels-turned-narcos’ premise, increasing involvement in the illicit drug industry causes insurgent groups to lose sight of their political aims, as they shift their focus to profit-making. The (former) Colombian rebel group, the FARC-EP, became a paragon for this idea. Drawing on primary research, we argue that the FARC-EP’s involvement in the illicit drug economy was itself political. Their involvement included governance activities, which are by their very nature political. Furthermore, these activities formed part of the FARC-EP’s political project, aimed at ensuring the reproduction of the peasant smallholder economy. Our argument challenges the rebels-turned-narcos premise more broadly by showing why involvement in the illicit drug economy, on its own, is insufficient evidence to posit the depoliticization of an insurgent group.     

The Pavlenko Construction Enterprise. Large-scale Private Entrepreneurialism in Stalin’s USSR

Abstract

This essay reviews the characteristic features of the Soviet ‘shadow economy’ by examining the activities of a major construction enterprise headed by N. M. Pavlenko from 1948 to 1952. This was the largest currently known private illegal enterprise of the Stalinist period. Pavlenko’s organisation built dozens of roads and railways under contract to state entities. Based on newly accessible archival documents, the methods of Pavlenko’s organisational activity and the reasons for its lengthy existence are considered. The author argues that, regardless of its extraordinary scale, Pavlenko’s enterprise was in fact typical of the Stalinist ‘shadow economy’, and that future archival research would probably reveal that this shadow economy was far more significant than has been understood to date.     

Corruption and reforms: A case of Poland's medical sector

This study focuses on the effects of Poland's reforms in the period 1990–2005 on corruption in the health care system. In the last 15 years Poland has transformed its economy drastically, introducing market-oriented reforms into almost every aspect of its economy. In this study we consider how different reforms changed incentives and mechanisms facilitating corruption in the medical care sector. Our conclusion is that corruption in Poland's medical sector has worsened since the onset of the marketization reforms. We support this conclusion primarily by analyzing changes in incentives for corruption and the number of mechanisms facilitating it. In addition, where available, quantitative data are provided, though we recognize that numerical estimates of corruption are subject to substantial error. We focus on three major forms of corruption: patient payments to secure medical treatment or improve its quality, payments from industry (mostly pharmaceutical and medical equipment producers), and the use by physicians of free public facilities for private patients.     

The developmental state: Israel, South Korea, and Taiwan compared

The growth performances of the Israeli economy during the years 1948–1973 were excellent by any criteria, and are comparable to the “miraculous” performances of South Korea and Taiwan. Excellent economic performances in the three countries were accompanied by the presence of an autonomous and an interventionist state as well as by strategies of governed development (in the spheres of finance, investment, and international trade). The comparison is used, to shed new light on the Israeli political economy as well as on the replicability of the developmental state model across regions, cultures, and political regimes. First, by comparing the three countries and pointing to the similarities in the role and autonomy of the state, the article offers a different interpretation of the Israeli economy from that offered by both neoclassical and neomarxist interpretations of the Israeli political economy. Second, successful cases of develoment are rare in our world; this should make the study of the Israeli political economy a valuable case-study for the proponents of the developmental state model. By pointing out the similarities in the growth performances and the developmental strategies of Israel, Taiwan, and South Korea, as well as the dissimilarities in their political regimes, their cultural traditions, and their regional settings, this article further strengthens the arguments in favor of state-guided economic development in developing countries. David Levi-Faur is a lecturer of comparative public policy and business and politics at the University of Haifa. He was a visiting scholar at the L.S.E., University of California, Berkeley, the University of Utrecht, and the University of Amsterdam.     

Classical Marxism and Maoism: A comparative study

The issue of the Marxist character of “Mao Zedong Thought” has never really been resolved. The present work is a comparative analysis of the classical Marxism of Karl Marx and Friedrich Engels and the ideology of Mao Zedong. The argument is made that whatever Marxism there was in Maoism was the “creatively developed Marxism” of V. I. Lenin—which allowed for socialist revolution in retrograde economic circumstances—something that had been specifically rejected by Marx and Engels. That led to the theoretical idiosyncrasies that characterized Maoism throughout its history, and ultimately resulted in the form rejected by Deng Xiaoping and post-Maoist China.     

North Korea’s Shadow Economy: A Force for Authoritarian Resilience or Corrosion?

An unofficial or ‘shadow’ economy like that in contemporary North Korea generates countervailing pressures for a socialist regime. It can buttress the regime by facilitating the cynical use of anti-market laws, alleviating shortages, helping the official economy to function, and creating vested interests in the status quo. On the other hand, the shadow economy can corrode the regime’s power by diminishing its control over society, encouraging scepticism about collective ideologies, and providing networks and material that can be used for opposition to the state. This article analyses these tensions in the DPRK, by drawing on 35 semi-structured interviews with North Korean defectors.     

Political incrementalism: Political lessons from China's 20 years of reform

The recent crackdown by the Chinese Communist Party government on the efforts of Chinese dissidents to organise the China New Democratic Party has raised a serious question among scholars: why has the Chinese leadership been so reluctant to initiate democratic reforms? But an equally important question is: how has the Chinese political system been able to accommodate drastic socioeconomic changes? Although Chinese leaders from Deng Xiaoping to Jiang Zemin have strongly opposed the Western style of democracy, they have continuously adjusted the country's political system to prevent socioeconomic chaos from occuring, chaos that has troubled many former communist states and Third World countries. This paper explores China's political incrementalism and explains how incremental political reforms have worked. It argues that, although Chinese leaders have so far been successful in accommodating social changes through incrementalism, they are still uncertain about how to cope with increasing social demands for political reform and democratisation.     

Economic ideas and institutional change: Evidence from soviet economic debates 1987–1991

The article analyses the shift in ideas that took place in Soviet economic thought between 1987 and 1991 and its relation to the changes in the real economy. The main focus of the article is on the issue of whether the evolution of Soviet economic thought in the analysed period changed in a gradual, path-dependent manner, or in a discontinuous, revolutionary fashion. Following the approach of Imre Lakatos, I argue that the conviction of being on the road to the ‘wholesome society’ formed the hard core of Soviet ideology, while ‘democratic centralism’ and the centralised economy provided its protective belt. Perestroika was the last attempt to save the hard core of Soviet ideology by adjusting the protective belt. This attempt failed, and the economic debates, which at first had been restricted to the protective belt, more and more approached its hard core, until it finally cracked. In this sense there was certainly a paradigm shift in Soviet economic thought. However, the notion of history as a purposeful process was not given up even by the Soviet adherents of monetarism. The utopian liberalism which became fashionable among Russian economists for a short period of time, it is argued, provides evidence that paradigm shifts and path-dependence in the evolution of economic ideas are not mutually exclusive.     

The Invisibility of Wage Employment in Statistics on the Informal Economy in Africa: Causes and Consequences

Abstract

This article challenges the claim, along with the statistics that support it, that self-employment is by far the dominant employment status in the informal economy. The article begins by reviewing key insights from relevant literature on the informal economy to argue that conventional notions of ‘wage employment’ and ‘self-employment’, while unfit for capturing the nature and variety of employment relations in developing countries, remain central to the design of surveys on the workforce therein. After putting statistics on Tanzania’s informal economy and labour force into context, the analysis reviews the type of wage employment relationships that can be found in one instance of the informal economy in urban Tanzania. The categories and terms used by workers to describe their employment situation are then contrasted with those used by the latest labour force survey in Tanzania. The article scrutinises how key employment categories have been translated from English into Swahili, how the translation biases respondents’ answers towards the term ‘self-employment’, and how this, in turn, leads to the statistical invisibility of wage labour in the informal economy. The article also looks at the consequences of this ‘statistical tragedy’ and at the dangers of conflating varied forms of employment, including wage labour, that differ markedly in their modes of operation and growth potential. Attention is also paid to the trade-offs faced by policy-makers in designing better labour force surveys.     

Rethinking civil society: radical politics and the legitimization of unpaid activities

This article examines recent debates on the concept of civil society as a source of renewal for political economy and a contributing factor to the establishment of social inclusion. In terms of political economy it contends that the relationship between markets and civil society has been under-theorized and that the potentially deleterious impact of the hegemony of market discourses on civil society has been neglected. Thus there is a need to engage with more radical theories which suggest that, if we want to support and legitimize socially useful activities such as unpaid work, spaces within civil society should be protected from the penetration of economic rationality. To this end the article argues that, following contemporary radical democratic theory, it is important to think of civil society as a differentiated space in which a wide range of actors engage in a multiplicity of activities. However, where radical democrats have tended to focus on a differentiated space for political engagement, this article concludes that we should do the same for economic and non-economic activities and, in so doing, construct an alternative political economy to the hegemony of market discourses.     

From ‘Constructing Socialism’ to a ‘Socialist-oriented Market Economy’ in Contemporary Vietnam: A Critique of Ideologies

Abstract

In power, the Vietnamese Communist Party has experienced three ‘moments’ of growth, each with some differences of detail and of meanings: ‘traditional communism’; the transition from a planned to a market economy in the 1980s; and, since 1992, a ‘socialist-oriented market economy’. For each, the article discusses the ideologically defined nature of change; intentionality—‘how growth was to happen’; and the quantitative data used. It suggests that critiques throughout the period have engaged with the intentionality issue: in the first moment, by isolating the socialist relations of production within socialist construction as the cause of difficulties; more recently, by engaging with the lack of effective policy despite contemporary ideology's unreliable belief in policy as key to growth.     

Settling the Sino–Russian Border Issue: Land in Exchange for a Strategic Partnership?

Abstract

China has been committed to resolving its border disputes with Russia since the late 1980s and expedited this move in the wake of the Cold War in the hope of removing what has been referred to as the ‘biggest obstacle’ to the establishment of a strategic partnership with Russia. In so doing, China pursued three interconnected objectives. The first relates to China’s strategic and security environment that, in the Chinese perspective, has worsened since the United States has unilaterally engaged in a policy of China-containment. The second objective is to maintain China’s economic growth through a partnership with its resource-abundant neighbour. Chinese political leadership and academics have considered economic modernisation as their ‘paramount’ task since Deng Xiaoping launched market reform in the late 1970s. The third objective is to fulfil China’s dream of restoring its past glory by rising in the global power hierarchy and reshaping the current world order more to its liking.