Great-Power Decentralization and the Management of Global/Local Economic Policy and Relations: Lessons in Fluidity from the People's Republic of China

Abstract

This article compares the practice of great power federalism in terms of global/local economic policy and relations in a context of expanding regional influence and transcontinental reach. The authors contrast China's recent decentralization experience with that of the FRG and the United States with respect to management of productive ventures, regulation of the economy, trade and commerce, fiscal relations, monetary policy and labor mobility. The three great-power states manage their complex and far-reaching economies through systems of multi-level governance that exhibit elements of convergence at the same time as each is headed in a defining direction. German federalism is making room for supranational involvement, US federalism emphasizes new managerialism at all levels of government and China's post Mao de facto federalism is launching provincial and sub-provincial governments on a booming economic trajectory. China's recent performance is particularly impressive given the size of its population and the extent to which its economy has been transformed and energized. In key respects, China's administrative system is the most decentralized and fluid. The effective participation of Chinese sub-national entities in transterritorial economic undertakings is particularly striking. China's experience suggests that the requisite energy and capacity to tackle trans-national economic challenges might lie at the sub-national level. Given the shifting nature of global pressures and local priorities, the extra-organizational sensitivities and linkages of sub-national public managers must include proximate and distant economic conditions, central government overseers and trans-national actors. In this dynamic context, the most fluid forms of federalism are likely to have an edge.