On the Fundamentals of a Successful Reform for National Prosperity¡ªAn Economic Analysis Based on the Practice of China¡¯s Reform

Xudong Chen (), Guoqiang Tian and Jijun Xia ()
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Xudong Chen: Institute for Advanced Research, Shanghai University of Finance and Economics, Shanghai 200433, China
Jijun Xia: School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2013, vol. 8, issue 4, 490-515

Abstract: This paper discusses the fundamentals required for successful reform, i.e., the necessary institutional changes required to make a nation grow sustainably wealthier. It argues that enriching the people is a prerequisite for a prosperous nation and further reveals the inherent logic behind the statement ¡°in order to enrich the people, they must be given private rights, and in order to protect the people¡¯s private rights, public power must be limited.¡± Based on this argument, we examine and analyze the experience of China¡¯s reform over the past 30 years and come to the conclusion that it is necessary to transform government functions and further deepen market-oriented reform. We hold that China¡¯s economic performance bears no special or exceptional economic law, and there does not exist the so-called ¡°China Model¡± characterized by government taking the leading role as a relatively mature, stable, and widely applicable development model, but that there does exist a Chinese development path or experience featuring the inherent logic of ¡°prospering the nation through enriching its people¡± that can be employed by countries all over the world.

Keywords: prospering the nation through enriching its people; information asymmetry; incentive compatibility; limited government (search for similar items in EconPapers)
JEL-codes: E61 O20 (search for similar items in EconPapers)
Date: 2013
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