BazEkon - The Main Library of the Cracow University of Economics

BazEkon home page

Main menu

Tomasz Legiędź (University of Lodz, Poland)
The Economic Consequences of the Recent Political Changes in China: the New Institutional Economics Perspective
Ekonomia i Prawo, 2019, t. 18, nr 2, s. 197-208, bibliogr. 32 poz.
Economics and Law
Ekonomia instytucjonalna, Neoinstytucjonalizm, Rozwój gospodarczy
Institutional economics, New institutionalism, Economic development
JEL Classification: B52, O10, O53.
Motivation: Over 30 years ago, Deng Xiaoping had the two-term limit on the presidency inscribed in the constitution of China. It was part of Deng's plan to institutionalize leadership changes in China, to avoid a return to one-man rule. This solution has ensured political stability which undoubtedly had a positive impact on economic growth in the following decades. However, in March 2018, the National People's Congress of China approved the removal of the two-term limit on the presidency. Moreover, president Xi Jinping consolidated his political power as the party voted to enshrine his name and political ideology in the party's constitution - elevating his status to the level of its founder, Chairman Mao. Aim: The purpose of this article is to analyse the impact of recent changes in the political system of China on the Chinese economy as well as the chances for further development of this country. The paper applies the new institutional economics perspective, particularly, the limited and open access orders framework proposed by D.C. North, J.J Wallis, and B.R. Weingast. Results: The article will present arguments proving that recent political changes in China will negatively affect growth and economic development. The concentration of power in the hands of one man could be a symptom of regression of the limited access order, which, according to North, Wallis, and Weingast affects not only the economy but also could increase the risk of violence.(original abstract)
Full text
  1. Acemoglu, D., & Robinson, J.A. (2012). Why nations fail: the origins of power, prosperity, and poverty. New York: Crown Publishers.
  2. Acemoglu, D., Naidu, S., Restrepo, P., & Robinson, J.A. (2014). Democracy does cause growth. NBER Working Paper Series, 20004. doi:10.3386/w20004.
  3. Bell, D.A. (2015). The China model: political meritocracy and the limits of democracy. Princeton: Princeton University Press.
  4. Chen, J. (2013). A middle class without democracy: economic growth and the prospects for democratization in China. New York: Oxford University Press. doi:10.1093/acprof:oso/9780199841639.001.0001.
  5. Connolly, R. (2013). The economic sources of social order development in Post-Socialist Eastern Europe. London-New York: Routledge doi:10.4324/9780203095355.
  6. Cox, G.W., North, D.C., & Weingast, B.R. (2015). The violence trap: a political-economic approach to the problems of development. SSRN Electronic Journal. doi:10.2139/ssrn.2370622.
  7. Creemers, R. (2018). Disrupting the Chinese state: new actors and new factors. Asiascape: Digital Asia, 5(3). doi:10.1163/22142312-12340094.
  8. Economy, E.C. (2014). China's imperial president Xi Jinping tightens his grip. Foreign Affairs, 93(6).
  9. Feenstra, R.C., Inklaar, R., & Timmer, M.P. (2015). The next generation of the Penn World Table. American Economic Review, 105(10). doi:10.1257/aer.20130954.
  10. Fu, D., & Distelhorst, G. (2018). Grassroots participation and repression under Hu Jintao and Xi Jinping. The China Journal, 79. doi:10.1086/694299.
  11. Grinin, L., Tsirel, S., & Korotayev, A. (2015). Will the explosive growth of China continue? Technological Forecasting and Social Change, 95. doi:10.1016/j.techfore.2014.06.023.
  12. Halper, S. (2010). The Beijing consensus: how China's authoritarian model will dominate the twenty-first century. New York: Basic Books.
  13. Herrington, L.M. (2011). Why the rise of China will not lead to global hegemony. Retrieved 27.01.2019 from
  14. Hu, A. (2014). China's collective presidency. Heidelberg: Springer. doi:10.1007/978-3-642-55279-3.
  15. Legiedź, T. (2018). From limited access to open access order in Taiwan. Journal of the Asia Pacific Economy. doi:10.1080/13547860.2018.1503767.
  16. Li, C. (2016). Chinese politics in the Xi Jinping era: reassessing collective leadership. Washington: Brookings Institution Press.
  17. Mo, J., & Weingast, B.R. (2013). Korean political and economic development. Cambridge: Harvard University Asia Center. doi:10.2307/j.ctt1x07wgf.
  18. Naughton, B. (2007). The Chinese economy: transitions and growth. Cambridge: MIT Press.
  19. Naughton, B. (2018). Is there a Xi Jinping model of economic reform? In H. Zhou, & W.C. Huang (Eds.), The impacts of China's rise on the pacific and the world. Kalamazoo: W.E. Upjohn Institute for Employment Research. doi:10.17848/9780880996358.ch3.
  20. North, D.C., Wallis, J.J., & Weingast, B.R. (2009). Violence and social orders: a conceptual framework for interpreting recorded human history. Cambridge: Cambridge University Press. doi:10.1017/CBO9780511575839.
  21. North, D.C., Wallis, J.J., Webb, S.B., & Weingast, B.R. (2007). Limited access orders in the developing world: a new approach to the problems of development. The World Bank Policy Research Working Papers. doi:10.1596/1813-9450-4359.
  22. North, D.C., Wallis, J.J., Webb, S.B., & Weingast, B.R. (2013). Limited access orders: an introduction to the conceptual framework. In D.C. North, J.J. Wallis, S.B. Webb, & B.R. Weingast (Eds.), In the shadow of violence: politics, economics, and the problems of development. New York: Cambridge University Press. doi:10.1017/CBO9781139013611.001.
  23. Olson, M. (1993). Dictatorship, democracy, and development. American Political Science Review, 87(3). doi:10.2307/2938736.
  24. Peerenboom, R. (2015). Fly high the banner of socialist rule of law with Chinese characteristics! Hague Journal on the Rule of Law, 7(1). doi:10.1007/s40803-015-0003-9.
  25. Ramo, J.C. (2004). The Beijing consensus. London: Foreign Policy Centre.
  26. Rodrik, D. (1997). Democracy and economic performance. Retrieved 27.01.2019 from
  27. Williamson, J. (2012). Is the 'Beijing consensus' now dominant? Asia Policy, 13(1). doi:10.1353/asp.2012.0012.
  28. World Bank. (2017). World development indicators. Retrieved 27.02.2019 from
  29. Wu, J. (2005). Understanding and interpreting Chinese economic reform. Mason: Thomson/South-Western.
  30. Yakovlev, A. (2012). Communist creed and its impact on the development of the economy and society: application of new approach of Douglass North to the analysis of the USSR historical experience. Mir Rossii, 21(4).
  31. You, J.S. (2013). Transition from a limited access order to an open access order: the case of South Korea. In D.C. North, J.J. Wallis, S.B. Webb, & B.R. Weingast (Eds.), In the shadow of violence: politics, economics, and the problems of development. New York: Cambridge University Press. doi:10.1017/CBO9781139013611.001.
  32. Zhang, X. (2017). Rule of law within the Chinese party-state and its recent tendencies. Hague Journal on the Rule of Law, 9(2). doi:10.1007/s40803-017-0052-3.
Cited by
Share on Facebook Share on Twitter Share on Google+ Share on Pinterest Share on LinkedIn Wyślij znajomemu