Thursday, October 02, 2003

More discussion on the nature of elite politics:

I also played with institutional ideas (of course,
that's what american political scientists do first), but the case of Zhao
Ziyang really argues against that. Even after he became Premier,
nominally the head of the State Council, he continued to champion the
cause of the local government and not speaking that much "Beijing hua."
The other interesting case is Jiang Zemin, who behaved like a central
bureaucrat before 1992. He later learned the trick and played to the
provinces. It is not clear whether he became more supportive of the
provinces because of his position or because he gained many followers in
teh provinces.

As for your second point, I agree that that investment hunger is always
there, and the central government was perfectly willing to waste money on
construction and large SOEs. However, it made a difference whether the
central government or the local government controlled financial policies.
When local government had it, they competed with each other to expand
money supply (similar logic as sending up "satellites" during the Great
Leap), which caused inflation. The central planners still waste money,
but they solve the collective action problem and can control money supply

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