Economic Reform Through Political Leadership in China’S State-Owned Economy
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ECONOMIC REFORM THROUGH POLITICAL LEADERSHIP IN CHINA’S STATE-OWNED ECONOMY A Dissertation Presented to the Faculty of the Graduate School of Cornell University In Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy by Wendy Elizabeth Leutert August 2017 © 2017 Wendy Elizabeth Leutert ECONOMIC REFORM THROUGH POLITICAL LEADERSHIP IN CHINA’S STATE-OWNED ECONOMY Wendy Elizabeth Leutert, Ph.D. Cornell University 2017 This dissertation examines the impact of political leadership on economic reform in China’s state-owned economy. I argue that the heads of public sector organizations, at the central level and below, shape reform policy experimentation and implementation through their choices concerning organizational strategy and structure. Following a review of the key state-owned enterprise reform policies in China since 1978, I utilize case study analysis to assess the effects of political leadership exercised by consecutive chairmen of a central state-owned enterprise on the firm’s reform. As the government-directed restructuring of state-owned assets remains an important component of economic reform in China, I next use logistic regression models to analyze the effects of political leadership on mergers among central state-owned enterprises between 2003 and 2015. Finally, I identify four mechanisms that link the organizational change fashioned by political leadership with broader evolution in the institution of state ownership. BIOGRAPHICAL SKETCH Wendy Leutert is from Bradford, Pennsylvania and Naples, Florida. She attended Wellesley College, graduating summa cum laude with honors in both political science and philosophy. After studying Mandarin at Cornell University’s Full-year Asian Language Concentration (FALCON) Program and at U.C. Berkeley’s Inter-University Program for Chinese Language Studies (IUP), she earned a master’s degree in international relations (Mandarin-taught program) from Tsinghua University and worked for International Crisis Group in Beijing. She received her master’s degree in government from Cornell University in 2014 and her Ph.D. in 2017. She is fluent in Mandarin Chinese. iv This dissertation is dedicated to my family and to my teachers. v ACKNOWLEDGMENTS My greatest thanks are to my dissertation committee members: Peter Katzenstein, Andrew Mertha, Nicolas van de Walle, and Zhou Li-an. Peter Katzenstein transformed the project by challenging me to constantly articulate, defend, and revise my ideas, and in doing so to read widely across disciplines. I am grateful to have had the privilege of learning from his unparalleled example of how to be a scholar, mentor, and teacher. Andrew Mertha inspired me to delve into the weeds of Chinese politics, to think creatively, and to embrace the challenges of fieldwork. Nicolas van de Walle provided invaluable feedback and enriched the project with a comparative perspective even as it became increasingly focused on China. Zhou Li-an enabled me to make the most of my fieldwork in Beijing by giving very generously of his time and insights into China’s political economy. Barry Naughton played a critical role as the outside reader for the dissertation defense. His prolific record of scholarship has for decades set the standard for research on China’s state-owned enterprises and economic reform. I am grateful for his comments and interest in this work. I also thank the faculty members of the Department of Government who were instrumental to this study and to my Ph.D. education at Cornell. Jonathan Kirshner challenged me to think in unconventional ways, shared advice for writing, and gave me valuable opportunities to develop as a scholar through research work and inviting me to serve as a conference discussant. David Patel’s seminar in field methods gave me the tools and confidence essential to craft successful strategies for research in China and beyond. Bryce Corrigan kindly shared his expertise in statistical analysis. Conversations with and the work of Allen Carlson, Xu Xin, Jessica Chen Weiss, and Jeremy Wallace deepened my knowledge of Chinese politics. This study would not have been possible without the assistance of staff in the Department of Government. Tina Slater has been an indispensable source of positivity and knowledge throughout the Ph.D., saving me along the way from multiple near- misses with deadlines. Laurie Dorsey helped to manage several of the grants that supported this project. Dinnie Sloman coordinated the challenges of conferencing across the Pacific so that conversations during its final stages could take place. vi Study outside the Department of Government also enriched my education at Cornell. In the Law School, Muna Ndulo shared his expertise in international investment law through a directed reading course and provided an example of how to leverage one’s scholarship for real-world impact beyond academia. In the Department of Economics, Henry Wan inspired me with his passion for research on industrial policy and East Asia’s economic transformation, and his introductions were instrumental to later conversations in Taipei and Beijing. In the Department of Sociology, a seminar in economic sociology with Victor Nee showed me new ways of thinking about institutions and expanded the perspectives and literatures that I used in this study. Cornell’s East Asia Program (EAP) and especially Joshua Young and Doreen Silva deserve special thanks for continuous support of my Ph.D. research. My fieldwork in Beijing and a crucial first semester of writing up after fieldwork would not have been possible without financial support from EAP. I am also grateful to EAP for providing programming and a collegial community of faculty and graduate students who broadened both my disciplinary horizons and knowledge of East Asia. Other experts at Cornell shared their valuable time and expertise. Zheng Liren at the Kroch Library introduced me to several China-focused databases and sources that informed this study. Lynn Thitchener at Olin Library provided an overview of its wide holdings and helped me navigate ways to leverage these resources for a cross-national collaborative study on Chinese state-owned enterprises. Susan Kendrick at the Johnson School of Management Library went above and beyond to identify databases that I could use to begin to analyze Chinese state-owned business groups. Kevin Packard and Françoise Vermeylen at the Cornell Statistical Consulting Unit as well as staff at the Cornell Institute for Social and Economic Research aided the statistical analysis. A grant from the Jeffrey S. Lehman Fund for Scholarly Exchange with China gave me the opportunity to connect and collaborate with scholars in the United States, Europe, and China. Conversations with Nis Grünberg and Ye Jing have continued ever since, and their ideas and critiques have improved this study. Aldo Musacchio shared his research on state-owned enterprises in Cambridge and participated in the final workshop for the project at Cornell. vii Beyond Cornell, I am grateful for financial support from the Smith Richardson Foundation, the Institute for Humane Studies, the Fulbright-Hays Doctoral Dissertation Research Abroad Program, the Ford Foundation, and the Chinese Scholarship Council that enabled me to carry out research and writing. This study would not have been possible without the generosity and guidance of many scholars I had the privilege of interacting with in China. These individuals, who include but are not limited to those mentioned here, selflessly shared their insights and contacts even when I was still at the beginning of a steep learning curve. At Peking University, Jia Qingguo kindly served as my institutional sponsor for the first year of my field research. Chen Zhiwu of Yale University and Hong Kong University advanced my study with his insights into China’s economy and politics, encouragement, and referrals. The unexpected privilege of a meeting with renowned economist Wu Jinglian inspired me to strive for a richer historical perspective and greater incorporation of Chinese-language scholarship. Wu Yongping at Tsinghua University provided an example of how to study political leadership in economic reform with his scholarship on Taiwan. Tao Ran at Renmin University was immediately supportive and provided valuable advice and referrals at a crucial stage of the field research. Zhou Jingxin at Peking University helped me to gather data about state-owned enterprises for this research. The employees at the central state-owned enterprise in Beijing where I conducted case study analysis made my research on that company possible by welcoming me into the office and sharing their valuable experiences and knowledge. I am especially indebted to the colleagues in my department. They gave me opportunities to learn by assisting their work, patiently explained the company’s operations and organizational structure, and sustained the research with their companionship and humor over many lunches in the cafeteria. In Beijing, the community of scholars and classmates formed during my master’s degree at Tsinghua University was another important source of assistance. Chen Qi showed me how to navigate Chinese academia and helped me to overcome several research obstacles at short notice. Matt Ferchen, Li Wei, Wang Haibin, and Xu Jin all offered feedback on multiple occasions and aided this study through advice and viii referrals. Former classmates including Mei (Melissa) Cen, Cui Zhinan, Tang Tingting, and Mee Choo Wong provided support and fun during get-togethers