Institutional Innovations in China: Can China Serve as an Alternative Development Model

Abstract

Over the past few decades China has emerged as an alternative model of development especially for countries in Asia and Africa. Not only has China achieved impressive growth rates, lifted almost half a billion people out of poverty but has also emerged as a rising global power. Many economists and development practitioners look towards western democracies as a model of growth and development. However due to China's silent rise as a major global economic power many countries particularly in Asia and Africa are relating to China's institutional reforms and development. These include reforms towards greater decentralization, formation of special economic zones, promotion of private entrepreneurship and other experimentations. This paper looks at these institutional innovations in light of their relevance for other developing countries. The analysis in this paper elucidates why China can serve as an alternative model of development despite some imperfections. The unorthodox, innovative and experimental solutions provided by the Chinese experience shows that governments in developing countries should be open to creative ways of problem solving rather than rigid technocratic approaches.