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China’s rule of law in New Era: the rise of regulation and formalism

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China’s financial development and economic growth is achieved under weak legal institutions. The literature attributes this counter-example of law–finance–growth nexus to (a) alternative mechanisms in China such as incentives, reputation and relationships and(b) a well-functioning xinfang system with common law features.In recent years, China has made increasing efforts to strengthen its rule of law. The Communist Party of China (CPC) has taken the lead by launching a far-reaching campaign against corruption, establishing a system of inspection tours, and promulgating a large number of regulations. We argue that using regulations to complement laws is effective: CPC has enough bureaucratic prowess to crack down on corruption whereas the courts are subject to sub-version by powerful interests. We also discuss the drawbacks of this approach: regulations aiming at ex ante control of corruption substantially increase procedural formalism and limit the discretion of local governments and state-owned enterprises.
Original languageEnglish
Pages (from-to)313-318
JournalJournal of Chinese Economics and Business Studies
Volume17
Issue number3
Early online date30 Sep 2019
DOIs
Publication statusPublished - Oct 2019

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  • AN_2019_cright_JCEBS_China’s rule of law in New Era

    Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Chinese Economics and Business Studies on 30/09/2019, available online: http://www.tandfonline.com/10.1080/14765284.2019.1672418.

    Accepted author manuscript (Post-print), 147 KB, PDF document

    Due to publisher’s copyright restrictions, this document is not freely available to download from this website until: 30/03/21

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