Special Deals with Chinese Characteristics
Chang-Tai Hsieh and
Zheng Michael Song
No 25839, NBER Working Papers from National Bureau of Economic Research, Inc
Chinese local governments wield their enormous political power and administrative capacity to provide “special deals” for favored private firms. We argue that China’s extraordinary economic growth comes from these special deals. Local political leaders do so because they derive personal benefits, either political or monetary, from providing special deals. Competition between local governments limits the predatory effects of special deals.
JEL-codes: E02 F00 N00 P0 (search for similar items in EconPapers)
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Published as Special Deals with Chinese Characteristics , Chong-en Bai, Chang-Tai Hsieh, Zheng Song. in NBER Macroeconomics Annual 2019, volume 34 , Eichenbaum, Hurst, and Parker. 2020
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