Explaining Economic Growth in China: Testing Sociological Tools for Validity. Book Review: Nee V., Opper S. (2012) Capitalism from Below: Markets and Institutional Change in China, Cambridge, MA: Harvard University Press
Today it makes little sense to ask why social scholars would be interested in China’s economy insofar as the answer is obvious. The growth rate of the Chinese economy and the duration of its growth period are stunning. It is likely that in the near future China will outrun the US in terms of GDP and will become the largest economy in the world. Moreover, China has made huge progress in GDP per capita. But this is not the only reason to be interested in China. Notably, the communist party is still in power there, and by the standards of Western democracies, China remains an authoritarian state. Taken together, these characteristics form a paradox: How could communists produce such huge economic growth? The recent history of socialist countries seems to show that this is impossible. Although the Soviet Union sometimes demonstrated rapid growth, it could not sustain the pace in the long run. In the Chinese case, we face a more fundamental phenomenon than just the mobilization of a country to achieve vital objectives (usually with high costs).
“Capitalism from Below: Markets and Institutional Change in China” by Victor Nee and Sonja Opper suggests the answer to this question [Nee, Opper 2012].
Modern capitalism favors values that undermine our face-to-face bonds with friends and family members. Focusing on the post-communist world, and comparing it to more 'developed' societies, this book reveals the mixed effects of capitalist culture on interpersonal relationships. While most observers blame the egoism and asocial behavior found in new free-market societies on their communist pasts, this work shows how relationships are also threatened by the profit orientations and personal ambition unleashed by economic development. Successful people in societies as diverse as China, Russia, and Eastern Germany adjust to the market economy at a social cost, relaxing their morals in order to obtain success and succumbing to increased material temptations to exploit relationships for their own financial and professional gain. The capitalist personality is internally troubled as a result of this "sellout," but these qualms subside as it devalues intimate qualitative bonds with others. This book also shows that post-communists are similarly individualized as people living in Western societies. Capitalism may indeed favor values of independence, creativity, and self-expressiveness, but it also rewards self-centeredness, consumerism, and the stripping down of morality. As is the case in the West, capitalist culture fosters an internally conflicted and self-centered personality in post-communist societies.
Institutions affect investment decisions, including investments in human capital. Hence institutions are relevant for the allocation of talent. Good market-supporting institutions attract talent to productive value-creating activities, whereas poor ones raise the appeal of rent-seeking. We propose a theoretical model that predicts that more talented individuals are particularly sensitive in their career choices to the quality of institutions, and test these predictions on a sample of around 95 countries of the world. We find a strong positive association between the quality of institutions and graduation of college and university students in science, and an even stronger negative correlation with graduation in law. Our findings are robust to various specifications of empirical models, including smaller samples of former colonies and transition countries. The quality of human capital makes the distinction between educational choices under strong and weak institutions particularly sharp. We show that the allocation of talent is an important link between institutions and growth.
The volume deals with the current frontier research in entrepreneurship theory in Europe on contextual and processual specifics of entrepreneurial practice
Effective property rights protection plays a fundamental role in promoting economic performance. Yet measurement problems make the relationship between property rights and entrepreneurship an ambiguous issue. As an advancement on previous research in this paper we propose a new approach to the evaluation of the security of property rights based on direct measures that overcomes some limitations of previous studies. We apply this new metrics to a survey of manufacturing firms in Russia to identify the economic effects associated with the lack of property protection in a transition economy. Our analysis supports the view that there is a close relationship between institutions, property rights and economic growth. Our findings confirm that redistributive risks provide a depressing effect on investment and innovative activity of manufacturing enterprises and potentially result in a huge loss in efficiency and economic growth, which in other institutional settings could have been avoided.
The book contains papers by the leading contemporary researchers of entrepreneurship who belong to the group of awardees of the Global awared in entrepreneurship research as well as outlines of their research activities. First concise collection of the mainstream entrepreneurship research ideas of the end of the 20th - beginning of the 21th centuries.
Relevance of statement and studying of a problem of entrepreneurial culture development of future managers is connected with features of development of the country, with orientation of the higher education to humanistic values and meanings. In our opinion the entrepreneurial culture can be considered in a context of cultures. The article presents a view on entrepreneurial culture in a context of "culture of usefulness and dignity". The entrepreneurial culture in the modern conditions, arisen as culture of usefulness, seeks to develop in itself lines of the personality significant culture, focused on dignity, "public understanding", the humanistic principle of "solidarity". Solving problems of modernization of the higher education, relying on competence-based approach, development of entrepreneurial culture in professional education of modern managers gets a special sense. Authors defined the basic principles and problems of the educational process directed on formation of entrepreneurial culture. Experience of faculty of management of NRU HSE in Nizhny Novgorod is presented in article, the program of entrepreneurial culture development of the youth is described. The program is realized consistently at three levels, each is caused by the purposes, methods, forms, age features of participants: The first level - "Formation of an image of the modern businessman". The second level – "An entrepreneurial mentality. First experience". The third level - "I am a businessman! ".
The paper proposes a political and legal approach to conceptualizing modern democratic state as law-governed, social and secular. It defines legal, institutional, and socio-political characteristics of law-governed, social, and secular state.
One of the basic factors of economic growth in the information knowledge - based economy is the innovation component determined by the level of intellectual capital usage. Of the specifics in the usage of intellectual capital is that the cost evaluation of intellectual resources on the macro-level as a factor of economic growth is extremely difficult and there are more evaluation possibilities on the micro-level. The risk's estimation based on making use of discount theory.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The results of cross-cultural research of implicit theories of innovativeness among students and teachers, representatives of three ethnocultural groups: Russians, the people of the North Caucasus (Chechens and Ingushs) and Tuvinians (N=804) are presented. Intergroup differences in implicit theories of innovativeness are revealed: the ‘individual’ theories of innovativeness prevail among Russians and among the students, the ‘social’ theories of innovativeness are more expressed among respondents from the North Caucasus, Tuva and among the teachers. Using the structural equations modeling the universal model of values impact on implicit theories of innovativeness and attitudes towards innovations is constructed. Values of the Openness to changes and individual theories of innovativeness promote the positive relation to innovations. Results of research have shown that implicit theories of innovativeness differ in different cultures, and values make different impact on the attitudes towards innovations and innovative experience in different cultures.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.