The Governing Paradox in a Transition Economy: Repeated Institutional Reforms and Increasing Regulatory Capture in China’s Energy Sector

Abstract

Why have administrative reforms failed to improve the governance of China’s energy sector? This article argues that, in the context of China’s partial reforms, strategies for revamping China’s energy sector have oscillated between centralization and decentralization, creating a diverse array of stakeholders without providing any institutional coordination among them. In addition, corporatized state-owned enterprises have their own commercial interests, giving them incentives to capture industrial regulators. As a result, regulatory capture has become a serious threat to the governance of China’s energy sector. The findings of this study carry implications for our understanding of regulatory development in transitional economies.