Institutional Innovations, Asymmetric Decentralization, and Local Economic Development: A Case Study of Kunshan, in Post-Mao China

Abstract

The author provides an understanding of the concept of institutional innovations for local economic development in post-Mao China. With Kunshan, one of the most dramatically developed regions in Yangtze Delta, used as a case study, the aim is to understand how, under what circumstances, and by whom, locally initiated projects can be institutionalized and evolved in the context of China's transition. ‘Projects’ here refer to those reforms implemented by local governments initially without any permission from the centre. It is argued that the development of those projects can be understood as an evolutionary process, consisting of three mechanisms of local-central interactions: state's intention to connive; ex-post state endorsement, and ex-ante state adoption. Moreover, the innovations would be successful not only because of general contexts such as marketization, liberalization, and globalization, but also because of a particular process of economic decentralization to the local and political centralization under the party, or, as is proposed, asymmetric decentralization. Careerist local officials would like to utilize their decentralized resources to strive for more development opportunities, which could in turn become their ‘political capital’, enabling them to attract the attentions of upper level governments and hence gain promotion.