Understanding the Political Economy of Development
The underlying theme of this book is that there has always been tension between the two goals of statecraft: to improve people's welfare and to strengthen the state. Tensions often arise when the state fails to balance these two goals of development and when there are discrepancies between central government intentions and local responses. Development in China over the last few decades can be viewed as a search by the state for a balance between the two goals of development. Successes and failures in development in China over the last half-century can be understood in light of the political economy of this search.
Until 1978, the goal of strengthening the state was achieved at the expense of the welfare of the people. China's policies did try to merge developmental with socialist values before 1978; but when they were in tension, developmental values had to conform to a rather rigid interpretation of an ideological ideal. The values and institutions emanating from the Communist ideology thus became the major obstacle to a broader range of flexible policies necessary to address China's developmental problems, as development that would challenge the state was never acceptable. Given these constraints, Chinese policies appeared cyclical, as demonstrated by the cyclical model of ideological campaign and economic development in chapter 1.
Since the December 1978 Third Plenum of the Eleventh CCP Central Committee, concern with communist ideology has been replaced by a concern for development. The Chinese leadership has not only intro-