The purpose of economic reform is to reduce distortions and enhance efficiency.
However, when reforms are partial and incremental, individuals and local governments
are often able to capture the rent inherent in the gradual transition process.
Young (2000) warned that such rent-seeking behavior might lead to increasing market
fragmentation. Empirical studies have shown the opposite in the product market. This
article argues that as the rent from China’s product market has been squeezed out due
to deepening reforms, rent-seeking behavior may have shifted to the capital market.
Further reforms are needed in the capital market to squeeze out these rent-seeking
opportunities, just as those from the product and labor markets were squeezed out
earlier
Is data on this page outdated, violates copyrights or anything else? Report the problem now and we will take corresponding actions after reviewing your request.