A New Form of Governance or the Reunion of the Government and Business Sector? A Case Analysis of the Collaborative Natural Disaster Insurance System in the Zhejiang Province of China

Abstract

ABSTRACT The purpose, structure, and outcomes of cross-sector collaborations are subject to the institutional environment from which they emerge. This article examines how institutional background could determine the nature of cross-sector collaborations through a case study of the collaborative natural disaster insurance system in the Zhejiang Province of China. Although a guiding principle of reform in China asserts that the system should be operated based on market mechanisms, we find in practice that a market for insurance is far from being established. Insurance products are primarily designed by the government and marketed through administrative mobilization instead of market channels. Business organizations take a passive role, without attempting to create new insurance products, while enjoying monopolistic benefits created by connections to the Chinese government. The emerging government and business collaboration in China may not represent a new governance form to maximize efficiency, but instead a reunion of the government and business sector after years of efforts of separating public and private powers.