Great-Power Decentralization and the Management of Global/Local Economic Policy and Relations: Lessons in Fluidity from the People's Republic of China
| DOI | 10.1177/0020852303069002008 |
| Author | Chen Xiaoyuan,Edmond Orban,Peter H. Koehn |
| Published date | 01 June 2003 |
| Date | 01 June 2003 |
| Subject Matter | Journal Article |
Great-power decentralization and the management of
global/local economic policy and relations: lessons in
fluidity from the People’s Republic of China
Edmond Orban, Chen Xiaoyuan and Peter H. Koehn
Abstract
This article compares the practice of great power federalism in terms of global/local
economic policy and relations in a context of expanding regional influence and
transcontinental reach. The authors contrast China’s recent decentralization experience
with that of the FRG and the United States with respect to management of productive
ventures, regulation of the economy, trade and commerce, fiscal relations, monetary
policy and labor mobility. The three great-power states manage their complex and far-
reaching economies through systems of multi-level governance that exhibit elements
of convergence at the same time as each is headed in a defining direction. German
federalism is making room for supranational involvement, US federalism emphasizes
new managerialism at all levels of government and China’s post Mao de facto
federalism is launching provincial and sub-provincial governments on a booming
economic trajectory. China’s recent performance is particularly impressive given the
size of its population and the extent to which its economy has been transformed and
energized. In key respects, China’s administrative system is the most decentralized
and fluid. The effective participation of Chinese sub-national entities in trans-
territorial economic undertakings is particularly striking. China’s experience suggests
that the requisite energy and capacity to tackle trans-national economic challenges
might lie at the sub-national level. Given the shifting nature of global pressures and
local priorities, the extra-organizational sensitivities and linkages of sub-national
public managers must include proximate and distant economic conditions, central
government overseers and trans-national actors. In this dynamic context, the most
fluid forms of federalism are likely to have an edge.
From a political/administrative systems perspective, it is striking that three of
Earth’s great powers at the turn of millennium — the United States of America,
The late Dr Edmond Orban was Professor of Political Science, The University of Montreal.
After retirement, Professor Orban became deeply interested in the PRC, a country he
visited on two occasions for invited lectures. He initiated this, his final scholarly, project.
Chen Xiaoyuan is Associate Professor and Deputy Head, Department of Government and
International Relations, Fudan University. Peter H. Koehn is Professor of Political Science
at The University of Montana, Missoula, and a Fulbright New Century Scholar. He teaches
courses on public administration, development studies, global migration, and comparative
politics. The authors acknowledge with gratitude the helpful comments of three anony-
mous reviewers. CDU: 35.072.1: 338.92(51)
International Review of Administrative Sciences [0020–8523(200306)69:2]
Copyright © 2003 IIAS. SAGE Publications (London, Thousand Oaks, CA and New
Delhi), Vol.69 (2003), 235–258; 033536
02_IRAS69/2 articles 22/5/03 12:00 pm Page 235
the Federal Republic of Germany and the People’s Republic of China — operated
under intergovernmental arrangements that provided substantial sub-national
authority in the economic realm. Although there is considerable variability in
the legal framework and practice of decentralization in the three states, reflecting
differences in national culture, historical/political experience, population size,
resource distribution and territorial features, one also encounters interesting
common beliefs and practices and evidence of convergence. Paramount among
the currently shared elements is the fundamental assumption that federalism, or
federal-like institutional relations, enriches market-based economies. Indeed, its
market-preserving reputation has constituted the principal practical attraction of
federalism in post-Mao China (Montinola et al., 1995: 52–5).
The adoption and adaptation of political norms and institutions typically is
assumed to occur in a unidirectional fashion — from North to South. In this
article, we intentionally reverse the focus. We ask: Are there lessons from China’s
recent experience with decentralization that can benefit public managers at all
levels in the FRG, the USA and other states, as they grapple with new challenges
of managing economic policy and relations at intersecting global and local levels?
This seems a pertinent, perhaps even vital, question since the annual economic
growth rates sustained by the People’s Republic of China (PRC) consistently rank
among the highest in the world and its immense population benefited from
unprecedented gains in real income over the final two decades of the 20th century.
If there are lessons to be learned for public management and for the com-
parative study of public policy from Chinese practice, they are likely to involve
decentralization. Decentralization is the touchstone of federalism. If network and
coalition building along with cooperation and conflict among public officials and
non-governmental actors both horizontally and at different levels of government
provide the daily grist for administrative action (see Kettle, 2000b: 494–5),
decentralization shapes the managerial mill within which these interactions and
their attendant policy impacts occur.
However, decentralization is not the whole story. At the same time that they
continue to embrace decentralization, these three great powers are actively assum-
ing supranational obligations at the start of the new century. When considering
the relationship between federalism and economic policy, therefore, managerial
visions must encompass supranational and global interactions and marketing
arrangements. In 2001, the PRC acceded to membership in the World Trade
Organization and promised to adhere to a host of global free-trade rules (see
Koehn, 2002b: 399). The FRG successfully pushed for the introduction of a
common supranational currency, the euro, and consolidated its leadership posi-
tion within the European Union and its banking institutions (see Wood and
Yesilada, 2002: 141). Under the administration of President George W. Bush,
the world’s remaining superpower claimed responsibility for the pre-emptive
removal of ‘rogue regimes’ either through coordinated international military
action or, when support from other states is not forthcoming, unilaterally at its
own discretion. Presently, these are decentralized states with expanding regional
236 International Review of Administrative Sciences 69(2)
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