Chinese Township Village Enterprises as Vaguely Defined Cooperations

Martin L. Weitzman and Chenggang Xu

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper concerns the paradoxes and dilemmas that the very successful "Chinese model" presents for transition theory. The "Chinese model" is centered on the development of township-village enterprises. The main purpose of this paper is to make the case that TVE's are not just some form of disguised capitalist institution; they are much better described as "vaguely defined cooperatives" - meaning an essentially communal organization extremely far removed from having well defined ownership structure. That a transition strategy based on vaguely defined cooperatives should be so successful presents a severe challenge for traditional property theory. We speculate that to address this challenge properly, traditional property rights should be extended by including a dimension corresponding to the degree of individualism/cooperation existing in a society. A model of the required extension is described. Implications and application are discussed.

Date: 1993-06
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Journal Article: Chinese Township-Village Enterprises as Vaguely Defined Cooperatives (1994)
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