Historical institutionalism is an approach to studying regional development, and is characterized by the comparative setting embedded in historical and institutional environment. Using a historical institutional perspective, this paper attempts to shed lights on how historical endowments and local conditions affect the development path of localities within the context of transition economies. Empirical analysis is operationalized using a comparative case in two cities, Dongguan and Foshan, in the Pearl River Delta, China. Based on a time series of secondary data from the provincial and municipal statistical yearbooks from 1978 to 2012, we analyze the structure of non-state sector and its evolution in the wake of the opening up policy. Political devolution and fiscal decentralization has invoked the human agency to exploit the value of extra-local social networks in Dongguan, which has led to the rapid development of rural collective sector. In contrast, strong presence of social networks within the old planned system in Foshan has led to the dependence to the local government to secure resources and credit, and thus develop the urban collective sector. The close coalition between government and industry has created a vested interest in the collective sectors, which has further resulted in the sticky inertia of ownership transformation in the late 1990s. In Dongguan, the rural community organizations forged close ties with investors based on kinship, short-term contracts and management fees. At that time, neither the rural community organizations nor the overseas investors were willing to make long-term investments in the growth of the enterprises. Therefore, the complexity in transferring ownership right has been much lower in Dongguan. In consequence, insider privatization is more commonly practiced in Foshan, while Dongguan tends to adopt the form of outsider privatization. Although the organization of rural collective sector has led to a smoother process of ownership reform in Dongguan, the underdevelopment of local technological and entrepreneurial talents, as well as the incapability of local government to offer support in innovation-related infrastructure and governance could potentially influence its private sector in the long run. Overall, the historical institutional perspective suggests that the divergent path of the localities has been attributed to the ways the economic agents utilize the unique historical assets and social networks in the localities, and has resulted in path dependency at the later phase of reform and development.
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react-text: 471 The crisis of old industrial areas has often been explained by the dominance of a few traditional industries that faced dramatic decreases in demand. For at least two reasons this demand-side explanation is inadequate. First, it does not answer the question of why there is no regional redeployment of the productive resources that are set free by the decreases in demand. Second, it is not just... /react-text react-text: 472 /react-text [Show full abstract]
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Fuxin is a resource-based prefecture-level city of Liaoning province in Northeast China. Despite its remote location, short urban history and sparse population, the city was positioned as a nationwide role model of socialist economy by the central state in the Maoist era. However, the city economy quickly turned into decline in the wake of market reforms and resource depletion. Since 2001 the central state has been striving to revitalize Fuxin's economy, through pumping massive investment for developing new industry. Many claim that given the rapid rise of several new industries Fuxin has successfully regained its role model position for rust belt cities to revitalize, but this taken-for-granted conclusion is questionable. This City Profile challenges the prevailing role-model idea of Fuxin's revitalization, with a particular focus on the emerging negative impacts engendered by the top-down policy interventions. We critically analyze why national policies failed to help the city transform, and argue that Fuxin's economy has suffered from critical problems.
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This volume collects 22 articles by Masahiko Aoki, selected from writings published over the course of his 45-year academic career. These fascinating essays cover a range of issues, including mechanism design, comparative governance, corporate governance, institutions and institutional change, but are tied together by a focus on East Asia and a comparative institutional framework.
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With this paper we explore how institutional changes have influenced the regional development of Yiwu City, East China. The regional development in Yiwu City can be regarded as constituting a specific model in transitional China, which revolves around the establishment, growth, and internationalization of the local commodity trading market. The success of the Yiwu model lies in the interaction between globalization, local institutions, and commodity trading markets. However, we argue that the strategic coupling perspective has its limitations in explaining the development trajectory of the Yiwu model. We develop an integrated paradigm of regional development located between new regionalism and global production networks by synthesizing Scott institutional framework. We identify a pronounced and long-established cultural ognitive element in the entrepreneurial spirit of local people, which led to the establishment of a commodity trading market at the beginning of 1980s. However, the sustainable development of the Yiwu model needs to be supplemented by normative and regulative institutional pillars. We further argue that the developmental local state remains critical to the regional development in developing countries in terms of correcting market failure, encouraging entrepreneurship, and creating a competitive business environment to accommodate globalization.
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Abstract In recent years readers of urban studies journals have been regaled with articles on urban development in China. Contrary to expectations, what we read is not a multiplicity of accounts, but instead a repetition of one story: (a) the land market has emerged in China; (b) however, the market is imperfect; (c) therefore the best policy is to define property rights. It is surprising how uncritically scholars have accepted the idea that the land market has emerged, without defining the concept of the market. Perhaps even more surprising is the approval of the recommendation to define property rights, without asking what the ideology behind such a recommendation is and what social and political consequences it might have. This article will examine and criticize studies of this type. First, I will reconstruct what seems to be a new fashion in real estate and urban development studies, and then criticize its weaknesses, which are connected to the ambiguity of the concept of the market, insufficient empirical evidence, and ontological and ideological problems.
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