The Paradox of Reform: Rising Inequality, the Welfare State, and Decentralized Governance in Modern China

Chinese society has seen immense change over the last 40 years. Indeed, since the Reform and Opening began in 1978, China has effectively transitioned from a centrally planned communist system to a market-oriented... [ view full abstract ]

Chinese society has seen immense change over the last 40 years. Indeed, since the Reform and Opening began in 1978, China has effectively transitioned from a centrally planned communist system to a market-oriented authoritarian regime. This transition, while improving the lives of the vast majority of the Chinese people, has also been accompanied by a dramatic increase in economic inequality—specifically the urban-rural divide. The question this poses for observers of China is how will the government respond? This thesis argues that China’s distinctive policymaking process— known as decentralized experimentation—creates a unique institutional environment that emphasizes incremental reform and continual experimentation. These informal institutions have not only ensured the resiliency and adaptability of the party-state, but have also been a major factor contributing to regional and urban-rural inequality. Through a systematic analysis of China’s political and economic institutions, statistical analyses using newly aggregated data, and case studies based on field research, this project explores the paradoxical relationship between reform, inequality, and the nascent welfare state in modern China.