Showing posts with label state sector. Show all posts
Showing posts with label state sector. Show all posts

Mark Leonard (2013) China's ideological divides

In the past, Europeans assumed that as China became wealthier and more developed it would inevitably become more like [them]. This led to a lack of curiosity about China’s internal debates and an attempt to primitively divide its thinkers and officials into ‘reformers’ who embrace Western ideas and ‘conservatives’ who want to return to China’s Maoist past... The stereotype outside China is that Chinese politics has remained trapped in aspic even as the economy has been through radical changes. In fact, the country has gone from having a system animated by larger-than-life charismatic figures such as Deng or Mao towards the collective bureaucratic leadership of technocrats who exercise power according to strict term limits and are subject to regular reviews by their peers and constituents... [A]lthough China’s footprint will become ever more important for the world, the drivers of its internal debates will be increasingly domestic.

In the economic realm, the main divide is between a social Darwinist New Right that wants to unlock entrepreneurial energy by privatising all the state-owned companies and an egalitarian New Left that believes the next wave of growth will be stimulated by clever state planning. In the political realm, the main divide is between political liberals who want to place limits on the power of the state, either through elections, the rule of law, or public participation, and neo-authoritarians who fear these measures will lead to a bureaucratised collective government that is unable to take tough decisions or challenge the vested interests of the corrupt, crony capitalist class. In the foreign-policy realm, the main divide is between defensive internationalists who want to play a role in the existing institutions of global governance or emphasise prudence and nationalists who want China to assert itself on the global stage.

Mark Leonard (2013) Introduction to China 3.0
***CHINA 3.0

See also:
Mark Leonard (2008) China's new intelligentsia (Vietnamese translation by Pham Toan)
Trần Hữu Dũng (2009) Ổn định và phát triển: Trí thức Trung Quốc đang nghĩ gì?

Edmund Malesky and Jonathan London (2014) State-led development in Vietnam

Although we lack counterfactual evidence, it appears likely that SOEs were more often beneficiaries, rather than engines, of growth. Recent analyses of the role of the state sector in Vietnam have demonstrated [...] profound underperformance. As Pincus et al. 2012 demonstrate, SOEs in Vietnam can no longer claim to be the vanguard of the working class, at least in a numerical sense, as they account for only 11% of employment and have actually seen net employment drop by 22% between 2006 and 2010. Growth decompositions show that the state sector accounted for only 19% and 8% of GDP and industrial growth, respectively, between 2000 and 2010. Moreover, given their tremendous advantages, SOE contributions to export have been absurdly small, with most exporting accomplished by small-scale farmers and foreign investors. From textiles (Vinatex) to shipbuilding (Vinashin), Vietnamese SOEs have failed to be competitive on world markets. TFP studies by ownership in Vietnam have not been credible, because they fail to properly account for the contribution of free land and cheap capital to SOEs’ bottom line. For now, London’s (2013) characterization of Vietnam’s poorly performing industrial policy as “chaebol dreaming” remains apt.

With even modest assumptions about these cheap inputs, the state sector seems to have been a net drag on the Vietnamese economy. Three distortions have been documented: First, even though SOEs have not been successful at exporting in their core competencies, they are protected in those core competencies by Group A investment restrictions on private entry and phase-in requirements on WTO tariff-reduction obligations (Auffret 2003). Second, protections in core businesses, cheap land to rent to private producers, and cheap capital have generated tremendous cash flow that SOEs have funneled into subsidiary investment projects in unrelated businesses, as SOE managers seek to maximize their individual revenue. Vinashin, for instance, had 445 subsidiary businesses and 20 joint ventures, which ranged from real estate to hotels and karaoke. These sideline businesses crowd out more dynamic and entrepreneurial businesses (Nguyen & Freeman 2009). Third, Phan & Coxhead (2013) demonstrate adverse effects of these policies on labor markets, showing that state-sector activity has both depressed returns to skills in nonstate sectors and crowded out more skill-intensive forms of private-sector growth. The effect arises directly from the privileged role of the state sector and the lack of oversight to ensure meritocratic hiring. Because SOEs are capital intensive and protected, the returns to skills in SOEs are higher than in the private sector. Therefore, employment in SOEs is highly coveted. Nevertheless, hiring into SOEs is based on nonmarket mechanisms, such as familial connections, relationships, and outright corruption. Those without such connections have less incentive to invest in high-level skills, leading to lower-quality labor available for private-sector producers.

Critical to the debates about a new economic model is the demonstration by fine-grained scholarship that SOEs are remarkably unproductive relative to nonstate competition. Furthermore, scholars have shown that the greatest periods of growth and poverty reduction occurred when the state sector was at its weakest. In Vietnam, the 2001–2006 boom was correlated with robust growth in private investment; the post-2007 decline correlates with the return of SOEs.

Edmund Malesky and Jonathan London (2014) The political economy of development in China and Vietnam

Tai-lok Lui (2005) Middle-class politics in contemporary China

The middle class in China’s major cities — which is often expected to be a social force to bring about democratization and an open society — is likely to be a source of disappointment to the optimists, at least in the near term. My interviews with professionals, managers, and administrators in Shanghai reveal that they are low-profile liberals, if not conservatives. True, they are well aware of rising  social  inequalities,  regional  imbalances,  corruption,  and  other  social problems. They understand that the political environment is far from satisfactory and they would like a more responsive and accountable government. Yet,they will not push for democratization; in fact, it is not even high on their list of priorities of future changes. They prefer gradual reform, meaning a slow process of the loosening of existing authoritarian governance. Their conservatism is, in a way, understandable. Their interests are firmly rooted in the existing economic structure and they are eager to preserve what they have earned in recent years. Although many of those I interviewed were uneasy about the glaring gap between the rich and the poor, and express their concern about the welfare of the needy, on the whole they feel they deserve the level and the kind of material rewards they have attained.

Attempts to quicken the pace of liberalization and democratization in China will almost certainly scare the middle class away from politics. In fact, it is often when confronted by the authoritarian state that the middle class takes a pro-liberalization stance. Thus, middle-class politics (more appropriately, a kind of nascent middle-class politics) is two-faced. On the one side, it is a soft challenge to the Chinese authoritarian state. It will be a social force to promote liberalization and during such a process of liberalization we may see the emergence of civic and pressure groups that will loosen the existing top-down authoritarian control in many aspects of social life in China. On the other side, as noted above, the middle class is more conservative when it comes to concrete state policies and the direction of future economic and political reform. Middle-class politics as such does not guarantee the fostering of the kind of democratization that will truly empower those who are suffering in the course of the capitalization of the Chinese economy, namely, workers and peasants. Nor will middle-class politics necessarily include the interests of the poor in their political platform and re-form agenda. Middle-class politics, unless re-articulated to more radical ideology brought about by dramatic changes in the structural setting at a critical conjuncture, is primarily about the interests of the middle class.

The rise of the middle class and the gradual emergence of middle-class politics in China are no substitute for agitation and resistance from below. Paradoxically, what is absent in contemporary Chinese politics is a true representation of the interests of the oppressed in the existing political structure.

Tai-lok Lui (2005) Bringing class back in, Critical Asian Studies, 37(3): 473-480

Jacqui Baker & Sarah Milne (2015) Southeast Asian dirty money states

Illicit revenues have not been part of the normative story of state formation. Rather, illegal practices and monies have been framed under the banner of “corruption:” an aberrant, irrelevant and dysfunctional side economy to official narratives of statehood. Yet, as the articles in this thematic issue show, to dismiss corruption and criminal activity as outside of the realms of state activity is to exclude an important dimension of state formation in contemporary Southeast Asia. The sums generated by these illicit economies are considerable, and parts of the state are heavily dependent upon them for everything from everyday state work, to the extension of sovereignty and the shoring up political stability. Little wonder then that these states exert enormous effort in the capture, control, and organization of dirty monies. The empirical evidence therefore challenges conventional narratives about how weak fiscal states are unable to build fiscal power, and instead suggests that Southeast Asian states often degrade their fiscal architecture in pursuit of illicit profits.

The relationship between illegal rentier economies and the state does not necessarily entail chaos or an absence of the rule of law. Rather, illegal economies are systematically established and protected by the state – as seen in the highly organized and visible deployment of the tools and devices of state territorialization. For example, state laws and institutions are used to demarcate areas for illegal logging; public infrastructure and equipment like roads and trucks are used for illicit timber extraction; and specialized drilling machines are deployed openly for the construction of underground mining tunnels that enable so-called informal mining. This level of capitalization and investment indicates how “illegality” can be systematized and normalized at a remarkable scale and how actors involved expect such practices to endure over time. 

Perhaps the most prominent example of this is in To’s article on Vietnam, where the state has recently re-zoned woodland around an upland village as “national forest.” This territorialization has not only changed the legal status of the land, extending state propriety over it, but has ushered in a host of government officials, law enforcers, and park rangers to “protect” the forest and uphold the logging ban. Residents who engage in traditional timber extraction are effectively criminalized and local law enforcers have the authority to confiscate village-logged timber or issue fines. However, the law is rarely enforced as stated on paper. Instead, the law is “taxed” through bribes extracted from villagers, who effectively conduct logging on behalf of local authorities. As timber is subsequently transported through government checkpoints, local middlemen known as lawmakers – who are themselves officials with familial ties to the government-run People’s Committee – skillfully maneuver the illicit timber through and over the formal law. The biggest rents from this illegal logging industry are not kept by the villagers who fell the timber, but are accumulated by state institutions and state officials. In this way, territorialization of upland Vietnam is central to the establishment of an illicit regime of extraction that finances and enriches the state.

Martin Gainsborough (2010) The Vietnamese state

To sum up, what we have, then, is a state which is little more than a disparate group of actors with a weak notion of 'the public good', using uncertainty, not impartial rules, as the basis of order. However, this is only part of the picture since the state also appears as greater than the sum of its parts - an institution which has 'self-preserving and self-aggrandizing impulses', to quote Benedict Anderson (1983), which takes people in and spits them out, and which re-creates itself in a way that cannot be reducible to the wit of any one individual. In Vietnam this comes across most clearly in terms of the way in which when this 'collectivity' of institutions and actors feel its core interests threatened, it is able to mobilize fairly robustly in order to clamp down on people or activities deemed to threaten the 'whole show'.

Martin Gainsborough (2010) Vietnam: Rethinking the state

Martin Gainsborough's (2003) interpretation of big corruption cases in the 1990s

'... big corruption cases are best understood as an attempt by the political centre to discipline the lower levels of the party-state against a backdrop of increased decentralisation under reform. Such an interpretation, it is argued, makes sense both of the increased frequency with which big corruption cases have occurred in the 1990s and also the ferocity with which they have been executed. It also represents a more authentically political account insofar as the centre is no longer seen as simply clamping down on corruption "in the public interest" but rather is seen as representing one side in a struggle for influence between different levels of the state, where the prize is control over economic resources. Moreover, the successful prosecution of Tamexco and other big corruption cases, along with the centre's assertion of its authority in a number of other areas... suggests that the centre is far from a spent force. This is frequently not the dominant view in the academic literature.

The ideas put forward here also shed light on another issue, namely how we understand the "rule of law". Prosecution of big corruption cases through the courts might be read as representing a positive development as the party, once regarded as being "above the law", is now seen as willing to subject the disciplining of its own ranks to just legal process. However... more convincing is the idea that the "rule of law" is being used to pursue the interests of one particular arm of the state, namely the centre. This ties with a distinction in the China literature between "rule of law" and "rule by law". The suggestion is that China is moving in the direction of the latter than the former. Such an observation also appears appropriate in the Vietnamese case.'

Martin Gainsborough (2003) Corruption and the Politics of Economic Decentralisation in Vietnam

Victor T. King, Phuong An Nguyen, Nguyen Huu Minh (2008) State-friendly 'middle class'

'State-led modernisation in Vietnam has created a middle class, the majority of whose members currently share a set of interests and political commitments, which are closely associated with the government.'

Victor T. King, Phuong An Nguyen, Nguyen Huu Minh (2008) Professional Middle Class Youth in Post-Reform Vietnam: Identity, Continuity and Change Link

Jee Young Kim (2004) Social structure in the mid 1990s

‘[I]n the mid 1990s, northern Vietnamese society had an occupational hierarchy roughly in the order of state-sector jobs, off-farm self-employment, and private farmers. A small occupational elite in jobs such as administrations (0.7 per cent) and professionals (3.5 per cent) and a middle tier of relatively better-off workers (24.8 per cent) existed alongside the vast majority of the population at the bottom of the hierarchy, who worked as farmers (71 per cent).’

Jee Young Kim (2004) Political capital, human capital, and intergenerational occupational mobility in Northern Vietnam Link

Jonathan London (2013) Welfare and inequalities

'Nor should the progressiveness of Vietnamese or Chinese market-Leninism be over-stated. States in both countries combine Leninist tactics of political organisation with market-based strategies of accumulation and social policies that exhibit both redistributive and neo-liberal elements. Unequal forms of citizenship imposed under state-socialism are reproduced and transformed in a manner that preserves the political supremacy of the Communist Party, while creating new market-based opportunities and inequalities. Terms such as “market socialism” or “capitalism with Chinese/Vietnamese characteristics” are inadequate as descriptors of the welfare regimes in these countries. By contrast, the term “market-Leninism” rejects the widely held but false notion that planned or market economies have any inherent political character. The market-Leninist welfare regimes in Vietnam and China demonstrate that as a class-based determinant of distributive out-comes, Leninist political organisation is ultimately much more important than socialism per se, at least for now.'

Jonathan London (2013) Welfare regimes in China and Vietnam Link

Martin Gainsborough (2002) The 'new landlord class'

'[I]s it right to see Vietnam as a country devoid of a large landowning class? Despite continued formal restrictions on the maximum permitted landholdings in the countryside, the reform years have been accompanied by the growing incidence of landlessness with its obvious corollary, namely, the re-emergence of large landowners. There is also a confluence of interest between the government's state desire for foreign investment in agro-processing and the need for large landholdings. Foreign investment in agro-processing has been limited to date, but there is some evidence that foreign agro-processors have been able to secure large tracts of land when desired.

One might also argue that while the large landowners of the ancien regime have been toppled, in their place there has emerged a new landlord class, namely Communist Party cadres and government officials. After all, it is very often they, or their family members, who dominate the rural economy. If this analysis is correct, the prospects for a widening of the political space look less good.'

Martin Gainsborough (2002) Political change in Vietnam: In search of the middle-class challenge to the state Link

Ian Coxhead and Diep Phan (2013) Returns on state employment

'What both [state-owned enterprises] and civil administration have in common... is access to rents, which when distributed among their workers, generate potential for incomes that are higher than the earnings of equivalent workers in competitive industries.

[S]tate sector firms are far more intensive in their use of educated workers than are non-state firms... [T]he proportion of workers in non-state firms with a college degree remains extremely low (1.8% in 2008) by comparison with state firms (30%).

In 1993, workers in the state sector earned less on average than workers in the non-state sector. But this was prior to the implementation of most market and labor reforms; since then, they have earned about 40% more per hour than non-state workers.'

Ian Coxhead and Diep Phan (2013) Princelings and paupers? State employment and the distribution of human capital investments among Vietnamese households Link

David Hausman (2009) Persistence of patronage through civil service reform

'True pay reform would threaten the interests of those who distributed and earned large allowances, project funding, or bribes; the government had not attempted it. The salary increases of the past decade had, like Vietnam’s other reforms, attempted to satisfy domestic and international pressure for reform without placing patronage networks at risk... [M]ost of the measures offered ample opportunities to continue old practices from within the framework of new policies.'

David Hausman (2009) Policy Leaps and Implementation Obstacles: Civil Service Reform in Vietnam, 1998-2009 Link

Thomas Heberer (2003) Who became entrepreneurs in the transition

'Former white-collar employees and managers of state or collective firms formed in our study [interviews carried out in 1996-1998 with 202 Vietnamese entrepreneurs throughout the country born 1940s - 1960s] the primary group of private entrepreneurs (managers 12.8%, white collar staffs 38.3%). This corresponds with a study carried out by the National Political Academy Ho Chi Minh (Central Party School) and the Friedrich Ebert Foundation (FES), according to which 42.7% of the entrepreneurs came from the state sector (civil servants, cadres). In 1991 a Swedish-Vietnamese study came to similar conclusions according to which the figure for former civil servants in the urban areas was 48% (in rural areas about 20%). This group of people not only possesses the best access to government resources and also to premises for production or raw materials, but also has good relationships with state or collective companies as well as to the authorities. With those advantages they have the right prerequisites to found their own firms, into which flow governmental resources as well as relationships with suppliers and customers from the former place of work. Moreover as a result of their earlier work they have at their disposal specific specialized knowledge.'

'At any rate 23.1% of the fathers of the entrepreneurs interviewed had earlier possessed their own company... [These] 'former capitalists'... emphasized that they had acquired through their earlier entrepreneurial activity knowledge and skills which had come of very good use in their renewed entrepreneurial activity. Furthermore a part of this group possessed sufficient capital which they had brought into secure keeping after the communist victory in 1975, and which could now be brought into use as starting capital. Capital and knowledge made possible the development of larger companies.'

Thomas Heberer (2003) Private Entrepreneurs in China and Vietnam: Social and Political Functioning of Strategic Groups Link

Martin Gainsborough (2010) Continuity in patronage and nepotism

'In relation to so-called 'non-Weberian' features of the state - patronage, personal relations, and centrality of money in politics - there is scarcely any evidence of change in the reform era with such features as entrenched as ever. This is as true for set piece political events, such as the five-year Party Congresses when patronage in the form of public office is circulated, as it is for citizens' everyday dealings with the bureaucracy where connections and the ability to pay are crucial in order to get things done (Gainsborough, 2007, 2009b). Moreover, nepotism rather than meritocracy is the norm in appointments to the government and civil service, which are themselves governed by informal, discretionary rules rather than 'rule of law' (Salomon, 2008). It is, of course, worth considering whether there are some subtle differences between such practices today and in the pre-reform period. For example, some would say that the sums of money involved in paying off office-holders are much larger today and that some practices which might have raised eyebrows a decade or more ago do not today. However, I would argue that we are dealing with questions of scale or extent here and the basic practices are as they have always been (Gainsborough et al., 2009).'

Martin Gainsborough (2010) Present but not Powerful: Neoliberalism, the State, and Development in Vietnam Link

Tuong Lai (1993) Relation between political power and economic power

'Từ những khảo sát xã hội học ở một số mẫu đại diện của khu vực đô thị và nông thôn trên một số tỉnh, thành; chúng tôi đã ghi được những 'điểm trồi' về mặt kinh tế trên cái mặt bằng chung của sự phát triển. Những 'điểm trồi' ấy có thể là những nhà doanh nghiệp mới nổi lên ở đô thị, có thể là những 'nhóm vượt trội' ở nông thôn. Những 'điểm trồi', những 'nhóm vượt trội' này thông thường là những nhóm đã hội đủ hoặc tương đối đã ba yếu tố... Phân tích kỹ vào các chiều cạnh của những điểm trồi, những nhóm vượt trội này đã bước đầu có thể nhận xét rằng yếu tố quyền lực có vai trò rất lớn. Phần lớn những người nổi trội lên về kinh tế đều có mối liên hệ rất chặt với yếu tố quyền lực. Hoặc chính bản thân họ đang nắm giữ những vị trí quan trọng liên quan đến chức năng kinh tế của bộ máy quyền lực, hoặc con cháu họ hay những người có liên quan mật thiết đến họ. Vai trò của yếu tố trí tuệ chưa thật nổi trội, thông thường nó lẫn trong hai yếu tố sở hữu và quyền lực.'

Tương Lai (1993) Tính năng động xã hội, sự phân tầng xã hội trong sự nghiệp Đổi mới của nước ta những năm qua Link