It has been increasingly recognized that the Chinese goverm-nent's newly acquired enthusiasm for economic development is a major factor explaining the relative success of China's transition from socialism. This paper argues that the changed behavior of the Chinese government is an outcome of a...

China's economic performance of the past two decades presents a puzzle for the economics of transition and development: Enormous private business incentives were unleashed that have fueled rapid economic growth despite the fact that China has had very weak "conventional institutions" (such as...

Before the transition governments had strong distributional objectives, which they pursued mainly by direct controls over state enterprise wage rates and hiring decisions, yielding a highly compressed wage distribution. During the reform they maintained similar controls over state enterprises,...