The State Legacy of China’s Success
China’s political elite remains an under-recognized driver of the country’s sustained, rapid economic growth. The Chinese economy’s transformation into a global powerhouse reflected not only the country’s post-1978 market-oriented reforms but also the history and character of its powerful government bureaucracy.
SHANGHAI – When Western economists and historians analyze China’s spectacular economic transformation over the past four decades, they tend to emphasize the productivity boom unleashed by the start of market-oriented reforms in 1978. But the role of the country’s political elite as a key driver of its emergence as an economic power has remained under-examined.
This is partly because it is hard to measure the contribution of political elites to a country’s economic development. Fortunately, a new study by Tomas Casas i Klett and Guido Cozzi from the University of St. Gallen provides a useful conceptual framework for understanding the Chinese economic model. Casas and Cozzi developed the annual Elite Quality Index (EQx), which measures and ranks the value that national elites create for a country.
Much like other East Asian countries, China has relied on strong state capacity and an effective bureaucracy to foster and coordinate economic development. In the most recent Elite Quality Index, the country ranks 27th (out of 151), the highest score among upper-middle-income economies. In the study’s political power index, which measures national elites’ influence over business regulation, rule-making, and labor law, China ranked 60th.
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