Special Deals with Chinese Characteristics
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Chapter in forthcoming NBER book NBER Macroeconomics Annual 2019, volume 34, Martin S. Eichenbaum, Erik Hurst, and Jonathan A. Parker, editors
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.
Special Deals with Chinese Characteristics, Chong-En Bai, Chang-Tai Hsieh, Zheng Michael Song
Commentary on this chapter:
Comment, Maurice Obstfeld
Comment, Antoinette Schoar