During 1995-2007, China enacted reforms fostering competition including acceding to the World Trade Organization (WTO) and encouraging entry of non-state firms. While there is evidence that firms reduced markups, there is competing evidence that incumbent firms gained rents. We estimate the...

China began its gradual economic reform in the late 1970s; Russia initiated radical reform in the early 1990s. During the course of reform, China has enjoyed rapid growth while Russia has contracted. This paper argues that one reason for this difference is that Chinese local governments enjoy...