Shift in governance and the emergence of a Chinese Business System | NWO Conference


Speakers


Abstract

NWO Conference (Netherlands Organisation for Scientific Research): July 23-28, 2006 in Hangzhou, PRC

 

The general idea of the conference

 

At the core of the conference lies the project Shifts in governance. From the beginning there has been the understanding that China offers the frame for the issues to be explained and not the "problem". This perspective had consequences for the conceptual and organizational side of the different sub-projects. (1) Though not being restrictive in the choice of approaches employed the emphasis is on economic actors (individual or firms), their behaviour, and the processes that underlie the China’s transformation process. Moreover, the analysis should focus on concepts open for further comparative analysis either at the macro-level when China is seen as a specific case within the group of transition economies, and adding to the knowledge of Comparative Business System literature, or at the firm-level when it is asked how the future business system looks like. (2) At the organizational level a group of experts has been invited to critically accompany the research project, and remind us if not suggest concepts and empirical methods tested in another context, yet which might help to "upgrade" the originally chosen design. The format chosen for the Hangzhou conference reflects these intentions.

  • Experts have been allocated to each of the seven sub-projects, each of which will be represented by three papers that will be circulated shortly. The experts in turn are kindly requested to start the discussion by summarising the papers and, more importantly, pointing out aspects that invite "upgrading" or modifications.
  • Aside from reviewing the subprojects, a general discussion is encouraged around issues repeatedly mentioned in the different contributions and discussions and which challenge the broader stock of knowledge and analytical tools, might that be organisation theory, Public Choice, Comparative Business System literature, or the literature on economic transformation and institutional change.
  • This is an ambitious plan yet as the experience with the previous two workshops in Rotterdam proved, one that can lead to a stimulating and enjoyable exercise provided everybody is familiar with the material sent around - and provided the environment supports brainstorming. Therefore, based on the uncontested assumption that academics don’t finish thinking once they have left the seminar room, the afternoon sessions will end at 4 p.m. to give time and occasion for more informal discussions.

Some remarks for the general discussion

How does economic transformation look like when explained by the activities of economic agents, or when interviews are used that reveal the intentions of or problems for the parties concerned? The findings of the empirical studies point to three issues that go beyond the (China) case at hand.

  1. Identifying economic actors. General models take it for granted that terms such as managers, owners, or political agents signify a range of economic activities such as investment, saving, buying and learning. It is also assumed that these actors enjoy the right to choose between alternative courses of action and the ability to calculate opportunity costs. Yet, this is not so clear when it comes to transition economies. As many studies suggest whether an economic actor is working under admittedly strangling constraints or is one who cannot (yet) be regarded as an autonomous subject is hard to define a priori. Thus for example firms in China start as the recipient of institutional change; when and whether they become corporate actors depends on further reforms. Instead entrepreneurs seem to be the single most crucial actors for transforming the business sector. As was pointed out by Baumol only recently the notion of entrepreneurship remained under-conceptualised in economics. This is reflected in the many questions that raised in the sub-project if not elsewhere: Do transition economies ask for a different kind of entrepreneurship when compared to market economies?, what is the link between (political, social) incentives, or risks and the kind of entrepreneurship we observe? What is the consequence of the entrepreneurship we observe on the future (market) system and its performance? Net to entrepreneurs the empirical studies find hybrids, organisational forms of firms which delude an easy definition. In the case of China there is a consensus that the most crucial economic actor is a network, understood either as a group of economic actors or as a means for co-ordinating economic activities. Despite a booming literature on networks some fundamental questions remain unsolved. Are networks indeed hybrids or are they a third co-ordination mechanism which co-exists next to hierarchy and the market as in particular economic historians point out? What is the difference between networks and collective action (of the Ostrom and Olson type)? Is the effectiveness of networks based on the co-ordination advantages, and scale economies of by the fact that they simultaneously generate a public good in form of (business) routines and knowledge. What is the effect of networking on the emerging business sector? How to introduce comparative studies of networks and other hybrids by which the differences between China and other transition economies can be explained?
  2. The political-economic process. How the political institutions - explicitly or implicitly - are introduced in concepts pre-determines the outcome of even such "technical" issues as how the IT-sector or stock-listed companies function. This begs the question which modifications are necessary in the Comparative Business Systems or the Public Choice literature, the literature on transition economies if not transaction costs theory of the Williamson-type. The challenge to modify concepts leads to the connected problem of methods and techniques.
  3. Methodology. It is inevitable that the conference will talk about concepts and methods. The use of a quantitative analysis, let alone institutional game theory and organisational ecology are provocative enough to ensure such a discussion. An additional point put forward by Hans reads as follows: Interviews are a necessary means for collecting data not available in official statistics, and a quicker way to learn what is in the making. Yet, what about information about informal institutions, such as local business practices? Those "constraints" are seldom scrutinised by economic actors as they are taken for granted. In this case a questionnaire is of limited use only. Instead familiarity with the Chinese (local) environment and/or having Chinese friends is crucial for identifying informal constraints on behaviour. This makes empirical research a time consuming effort. The question is whether some short cuts can be found which allow systematically analysing such informal constraints to the effect that typologies can be designed and a comparative analysis embarked on.

Visit the conference website for more information. You can view the programme of the conference and download the discussion papers here as well.

 

Contact information:

Dicea Jansen

Emaildjansen@rsm.nl