The Political Economy of the Evolution of China towards an Authoritarian Market Economy

Abstract

This dissertation provides a public choice view of modern China’s political economy. It explores the evolution of China towards an authoritarian market economy. In particular, the research focuses on the evolutionary path of institutional changes underlying the so-called China’s market miracle. The analysis begins with a fundamental assumption of public choice – “methodological individualism”, but it also links public choice to various fields. This dissertation finds that it is a rational choice of the self-interested authoritarian rulers to launch a growth-oriented incremental reform that is primarily driven by the private sector. Furthermore, the pro-competition policy reform steps have been the major institutional contributors to China’s market miracle, whereas the growing interest group activities within the private sector may hinder the legal reform and thus jeopardize the advancement of modern China’s market economy.