How the party-state runs the economy

A model of elite decision-making in the financial market

Authored by: Victor Shih

Routledge Handbook of the Chinese Communist Party

Print publication date:  August  2017
Online publication date:  August  2017

Print ISBN: 9781138684430
eBook ISBN: 9781315543918
Adobe ISBN:


 Download Chapter



How are financial and economic policies made in China? What motivates policy-makers? This chapter presents a quasi-market model for financial decision-making in which multiple agencies headed by power-maximizing ministers propose a range of policy options on multiple issues to spark the interest of power-maximizing elite policy consumers. If a senior leader or an elite decision body sponsors a policy, then the lead agency that proposes that policy would enjoy elite attention and heightened formal power. A market analysis of financial policy-making suggests an impetus for persistent policy innovations, a strong preference for rapid fixes, a tendency to disregard long-term consequences of policies, and prolonged jurisdictional competition between agencies involved in the financial sector.

Search for more...
Back to top

Use of cookies on this website

We are using cookies to provide statistics that help us give you the best experience of our site. You can find out more in our Privacy Policy. By continuing to use the site you are agreeing to our use of cookies.