A view from behavioral political economy on China's institutional change

Yongjing Zhang ()

China Economic Review, 2012, vol. 23, issue 4, 991-1002

Abstract: A behavioral political economy framework is built on the basis of prospect theory to explain the induced and imposed institutional changes during China's market reform, giving special attention to the integrated effects of economic and political institutions. According to prospect theory, how rulers frame their decisions — in the prospects of gains or losses, influences how much risk they will take. China's market reform has been largely framed in the prospects of economic gains, for which the continuously growing private sector is the driving force. China's central government adopts a growth-oriented incremental reform that coincides with the prediction of prospect theory.

Keywords: Behavioral economics; China; Incremental reform; Institutional change; Political economy (search for similar items in EconPapers)
JEL-codes: D03 D70 O43 P26 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:23:y:2012:i:4:p:991-1002

DOI: 10.1016/j.chieco.2012.05.002

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