Capitalism from Below: Markets and Institutional Change in China - Hardcover

Nee, Victor

Hardcover

ISBN 10: 0674050207 ISBN 13: 9780674050204

Publisher: Harvard University Press, 2008

Synopsis

More than 630 million Chinese have escaped poverty since the 1980s, reducing the fraction remaining from 82 to 10 percent of the population. This astonishing decline in poverty, the largest in history, coincided with the rapid growth of a private enterprise economy. Yet private enterprise in China emerged in spite of impediments set up by the Chinese government. How did private enterprise overcome these initial obstacles, to become the engine of China's economic miracle? Where did capitalism come from? Studying over 700 manufacturing firms in the Yangzi region, Victor Nee and Sonja Opper argue that China's private enterprise economy bubbled up from below. Through trial and error, entrepreneurs devised institutional innovations that enabled them to decouple from the established economic order to start up and grow small, private manufacturing firms. Barriers to entry motivated them to build their own networks of suppliers and distributors, and to develop competitive advantage in self-organized industrial clusters. Close-knit groups of like-minded people participated in the emergence of private enterprise by offering financing and establishing reliable business norms. This rapidly growing private enterprise economy diffused throughout the coastal regions of China and, passing through a series of tipping points, eroded the market share of state-owned firms. Only after this fledgling economy emerged as a dynamic engine of economic growth, wealth creation, and manufacturing jobs did the political elite legitimize it as a way to jump-start China's market society. Today, this private enterprise economy is one of the greatest success stories in the history of capitalism.

About this title

Review:

“The book is a story—rich and remarkable, yet readable—about productive economic institutions emerging as a by-product of individuals granted a little bit of wiggle room to pursue their interests. This one will be a point of reference for a long time.”
R. S. Burt, University of Chicago Booth School of Business

“Nee and Opper demonstrate how norms and networks promote economic development in the absence of good government policies. Their approach illuminates the phenomenal transformation of the Chinese economy and promises to explain other cases standard institutional theory cannot.”
M. Levi, University of Washington and University of Sydney

“A splendid book, brimming with ideas and full of important insights.”
W. W. Powell, Stanford University

“A thought-provoking book ...”
D. Acemoglu (MIT) and J. Robinson (Harvard University)

“Thoughtful and thorough.”
N. Desai, Economic & Political Weekly

“This well-researched, well-written volume will be a point of reference for many years to come.”
R.M. Ramazoni, Choice

“Capitalism from Below is a fabulous capstone to this body of work. It sets a standard for research in this field and will be essential reading for scholars of China’s reforms for a generation to come.”
D. Guthrie, George Washington University, The China Quarterly

“Capitalism from Below is a stunning book.”
M. Meyer, Wharton School, Administrative Science Quarterly

“A great piece of scholarship about the non-state sector in China over the last 30 years.”
K. Brown, University of Sidney, Asian Review of Books

“The basis for a new round in the ongoing debate over the political economy of reform.”
A. Wedeman, Perspectives on Politics

“This book will be useful to entrepreneurship scholars in general, and those studying institutional entrepreneurship and Chinese entrepreneurship in particular.”
S.F. Gohmann, Public Choice

About the Author:

Victor Nee is the Frank and Rosa Rhodes Professor at Cornell University, and Director of the Center for the Study of Economy and Society. Sonja Opper is Gad Rausing Professor of International Economics and Business at Lund University.

About this edition

• Publisher: Harvard University Press
• Publication date: 2008
• ISBN 10: 0674050207
• ISBN 13: 9780674050204
• Binding: Hardcover
• Number of pages: 431