Asymmetric Mutual Dependence between the State and Capitalists in China

Changdong Zhang

Politics & Society, 2019, vol. 47, issue 2, 149-176

Abstract: China has for almost four decades been experiencing a market transition and an associated tax state transition, leading to the emergence of capitalists who increasingly control economic resources and serve as important sources of tax revenue. Some theories suggest that these changes should give capitalists political power. From the perspective of the taxation institution, using a mechanism-based case study, this article investigates whether China’s emerging capitalists have gained bargaining power with the party-state. Findings suggest that hidden bargaining, patron-clientelism, legislature co-optation, and legal repression constrain their bargaining power. The underinstitutionalized taxation system has co-opted the capitalists through patronage and, more important, deterrence, thereby building an asymmetric mutual dependence between the local state and capital owners.

Keywords: co-optation via deterrence; mutual dependence; taxation; tax state transition (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:sae:polsoc:v:47:y:2019:i:2:p:149-176

DOI: 10.1177/0032329219833282

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