Federalism, Chinese Style: The Political Basis for Economic Success

Abstract

Each of these factors bodes ill for economic reform. Without political reform, economic returns remain at the mercy of political predation. Political discretion, in turn, implies that there are no impediments to the government reversing the reforms. In this context, leadership turnover would allow the new government not only to reverse the reforms, but also to confiscate considerable wealth and to punish those who were successful under the reforms. Alternatively, problems may [End Page 50] occur during unexpectedly hard times. With severe budget problems and a population clamoring for solutions, now, the immediate