institutional entrepreneurship and policy learning in china

Institutional Entrepreneurship and Policy Learning in China

Shulin Gu Institute of Policy and Management,

Chinese Academy of Sciences

2014-11-26-28 S GU 2014 UNU-MERIT MAASTRICHT 1

Motivation and Objectives Analysis on the dynamics and process of institutional change in China

——The historically profound reforms in the past decades have institutional changes in the heart

The IDRC Research Project (2008-2011): Innovation Systems and Inclusive Development: the lessons from Rural China and India

——In comparing lessons between China and India, it shows that policy-led institutional changes contributed mostly to including the rural population involved in opportunities with high speed development of these countries (much more than technological changes)

So important in analysis of institutional changes, while this is less done,

——Professor HUNG Shih-Chang, from Taiwan National TsingHua University（台湾清华大学洪世章）commented in 2009 CICALICS: “Innovation narratives require an acknowledgement of the confidence and capacity of human actors, which need not dissolve into ‘an institutional concept par excellence’”


Analytical framework-1 Define “institutional entrepreneur”

Expand Schumpeter definition on economic development and the role of entrepreneur on innovation, towards institutional change and the role of “institutional entrepreneur”:

Development is an expression of the distinct “dynamic” phenomenon, “is entirely foreign to what may be observed in the circular, flow or in the tendency towards equilibrium.”

Innovation is the source of the dynamics of development;

The entrepreneur introduces the new combinations as the prime endogenous cause of change (development) in the economic system.

Institutional entrepreneur is therefore defined as the sources of human actor for institutional changes；


Analytical framework-2 Differentiate ”general” versus ”specific” institutional changes

--Nelson 2008 Nelson and Sampan 2001 Basic/general institutions: basic rules of the game for the

economic and social system,

such as the broad legal regime and the widely held norms

Specific/concrete institutions: institutions that embed particular/concrete part of human activities in a society,

such as the division of labor among scientists, the various structures of coordination in public R&D, the complex set of ways of interacting between university and industry; and the way in which agricultural production is organized


Analytical framework-3 Compare “middle-up-down” versus “top-down” process of policy

learning --Nonaka 1994, Nonaka and Takeuchi1995

Both are types in division of labor and collaboration in the policy hierarchy;

In a top-down process: the top makes overall decisions , in order to set forth both goals and means employed for the whole system;

In a middle-up-down process, divisions of labor is basically

=>assign a strategic position to the middle in 1, finding/defining problems and 2, beginning to deal with the problems; results either serve for local specific solutions or used as inputs for the overall improvement of institutional settings

=> functions for the top level: 1, set forth the direction as field for interaction; 2, clear obstacles for self-organizing experimentations at the lower levels; 3, summarize/disseminate tested experiences; 4, integrate tested experiences into legal and regulatory framework


Case 1 The experimentation on economic and political reforms in Shekuo Industrial Zone in the 1980s

SheKou Industrial Zone established in 1979, as the first experimental zone; aiming at the invitation of foreign investment and export-oriented manufacturing.

The China Merchants Steam Navigation Co. Ltd. (China Merchants) was committed to create and run this zone, and Mr. Yuan Geng the Party Secretary and Administrative Chief of SheKou

Reforms in economic terms became norms of all the Zones and throughout China, (bonus to reward extra and excellent performance, open recruitment of talents; construction projects bidding, establishment of Sino-foreign share-holding enterprise )

Reform in political terms (Open election of major Zone-administration Officials, allow and invite media to publish criticisms towards the Zone management) were depressed and eventually vanished;


案例概述案例1 蛇口工业区

成立于1979年1月；

是“试验区中的试验区”（继而1979年4月决定设置4个开发区深圳、珠海、汕头、厦门；1984年进一步扩大到大连、秦皇岛、烟台等14个城市）；

1，蛇口工业区设立最早；

2，交通部和下属的香港中国招商局，有直通中央的背景；袁庚是交通部设置蛇口区的报告起草人；

3，中央有意把蛇口作为经济开发区政策的“抓手”，如 1984年3月，中共中央书记处和国务院联合召开“沿海部分城市座谈会”袁庚是这次会议唯一的特邀代表并作重点发言。会后5月4日，中共中央和国务院联合发文，进一步开放大连、秦皇岛、烟台等14个港口城市；

4，袁庚的资历、眼光和强势改革作风。


案例概述案例1 蛇口工业区（续）

1980年的超额奖每车2分至4分钱被直接上级勒令停止，官司打到中南海，胡耀邦和谷牧的支持下又继续（工地运泥量是每人每天20车与每人每天100车之差别）；

提出“时间就是金钱，效率就是生命”的口号，招致争论：是不是资本主义的东西？1984年1月邓小平视察给予肯定，后来传播到全国；

优秀业绩奖励制度，人才公开招聘制度，建筑项目招标制度，最早的中外合资企业，第一个法律事务所，第一个保险公司（现平安保险），第一和非国有银行（招商银行），等等，在全国扩散开来；

公开选举工业区管委会，媒体公开批评管委会工作（“我不同意你的观点，但我誓死捍卫你说出观点的权力”）等等，实施不久即在外力干预下式微；

袁庚于1992年离休；1993年交通部开始任命工业区全部领导人员；2004年撤销了蛇口工业区的独立建制。蛇口工业区带着她的光荣、贡献和遗憾，走进了历史。 2014-11-26-28 S GU 2014 UNU-MERIT MAASTRICHT 9

Case 2: The emergence and legitimation of Farmer’s Cooperatives (initially in Zhejiang Province, since 1997)

“Small farm problems”: the small family-based farms are faced, after the agricultural <Commune System> dismantled——a weak position of small farms in front of stronger brokers and supermarkets;

In 1997 a number of farmers started their cooperative for selling fruits, which was registered as 股份合作企业, a category set forth for industrial-purpose business.

Local administrations perceive the importance of such initiative in agricultural production. Their experiments included 1, sending a tour studying Taiwan Agricultural Association, 2, Introducing, in support of Zhejiang University, international expertise in farmers cooperative, 3, Stipulating local regulations and promotion policies; All these were proceeding in the interaction by the County, the City, the Provincial policy institutions;

At the national level, the “Farmers' Professional Cooperatives Law of the People's Republic of China” stipulated in 2006 and enacted since 2007 July.


案例概述案例2“农民专业合作社”

背景：

1980年代初，农业生产的人民公社制度解体，代之以土地承包基础上的农民家庭责任制，作为农业生产的基本组织形式；

农民的生产积极性提高，以此同时“小农问题”（small farm problem）凸显，即小农信息的不足，生产的高风险和在市场上的弱势；

1990年代中期以后，农业主管部门力推“公司加农户”模式试图解决小农生产和迅速工业化带来的农产品大市场之间的矛盾；在这个模式下供应问题部分解决，而农民的弱势没有改善；

2007年开始实施《农民专业合作社法》，至此，农民自行组织起来进行生产和销售的行动，得到法律的保护；

现在我国农业生产的多元组织形式已经初步形成，包括：家庭农场，农民专业合作社，农业公司（加农户），等。

本案例考察农民专业合作社这种组织形式的缘起和制度化过程


案例概述案例2“农民专业合作社”（续）

1997年温岭（浙江、台州）农民联合起来卖枇杷。他们的联合体在工商局登记为“股份合作企业”，又称自己是“合作社”；

温岭县时任农业局长徐亦平感到农民这种合作行动也许有前途，即组织一个小组考察台湾的“农协”；2000年起在温岭政府的刻意推动下，温岭和周边地区路出出现更多的农民“合作社”；

2004年在浙江台州召开了农民合作社国际研讨会，浙江省通过时任浙江省人大副主任原副省长许行贯支持并参与，浙江大学给以知识和智力支持，组织、邀请了若干位国际上知名农民合作社研究专家参会。会后同一年，台州市出台《台州市农民专业合作社管理办法》，浙江省人大颁布《浙江省农民专业合作社条例》；

《中华人民共和国农民专业合作社法》于2007年7月开始实施。浙江省的经验是全国性立法的重要依据；浙江人大的许行贯又是全国人民代表大会农民与农村工作委员会成员，浙江大学的徐旭初应邀参加了全国立法的起草工作；

到2009年中，我国有约18万个合作社，涉及农民人数2000多万；到2013年，合作社数量增加到73万户。各地发展态势不平衡；合作社的发展还有很长的路要走；


Discussion and summary Characteristics: General/basic institutions and Specific/concrete institutions


General/basic institutions (Case 1) Specific/concrete institutions (Case 2) =>The subject of reform concerns general institutional arrangement such as the rules for labor market, the norms for salary and reward system, the enterprise governance structure, and the management, and the management of capital construction project ; =>in the early 1980s, Shekou Zone took the path-breaking role to test out ways from the centrally planned regime;

=>The subject to reform relates specific part of the overall economic body——in this case it is with rural and agricultural sector;

=>Highly uncertain; whether experiments can be continues depends even on the opinion taken by individual top leader;

=>Lower level of uncertainty; when the problem is defined, the process of institutional change is relatively smooth;

=>Political actors: in collaboration between top political leader and reform “hero” at the experimental field; relatively highly personality-related;

=>More participatory and collaborative interactions among various levels of the policy hierarchy; more relied on the existing institutional structure;

Discussion and summary Process: top-down process (in general institutional change) and

middle-up-down process (in specific institutional change) A top-down process (Case 1) A middle-up-down process (Case 2)

=> Highly centralized, all the decisions (as what to test, what not to) are to be made at the top: ——

=>Experimental field proceeded actually under a direct commitment by the top, the functions of it is to offer necessary input into the top decisions; =>However the manager of the field is proactive and creative, those experiments which the top has not reached a consensus on it would soon or late be stopped; => Direct appealing to the top leaders was the way to solve disputes in the experimental field;

=>Primitive experiments may often already appear in daily-life（in 1997 the first Cooperative Enterprise was organized and registered in local Industrial and Business Bureau as a profitable enterprise)；

=> Key roles of the middle: they perceive the importance of such initiative, take actions 1, Sending a tour studying Taiwan Agricultural Association, 2, Bringing in, in support of Zhejiang University, international expertise in farmers cooperative, 3, Stipulating local regulations and promotion policies;

=>All these were proceeding in the interaction by the County, the City, the Provincial policy institutions; =>The Top: The national legislation agency involved based on the experiences in the middle, the “Farmers' Professional Cooperatives Law of the People's Republic of China” stipulated and enacted since 2007 July. =>Go widespread around the country Down beyond Zhejiang


Discussion and summary Policy learning：knowledge input and output

General institutional change (Case 1) Specific/concrete institutional change (Case 2) Inputs

=> Need breakthrough thoughts to bring about “radical” institutional change

=> More from the creation of the top and the field “Heroic” institutional entrepreneurs (together with the advice from international organization such as the World Bank)

=> Rely on more specific knowledge to be as learning knowledge base

=> More from specialists in various specialized research centers (such as the Center for Agricultural and Rural Development at Zhejiang University), in cooperation with policy makers (Both the groups are institutionally embedded;

Outputs => In the form like the Decision of the CPC Central , With legislation process followed;

=> Administration stipulations, regulations, laws


Discussion and summary Policy learning：knowledge input and output

Personal knowledge background and experience : as the basis for involved individuals in their cognition of problem, searching and absorption of relevant knowledge, and fingering out solutions to be tested（袁庚作为招商局官员长期驻香港的阅历；温岭/台州的徐亦平的大学教育背景）；

Organized knowledge acquisition: 1, Study tour to Taiwan organized by WenLing Country government 2, 2004 International Conference on farmers cooperatives brought in internationally advanced experience and understanding; the involvement of Zhejiang University Professors offered intellectual support for the absorptive capacity for Chinese policy makers;

Importance and consequence of Intensive and effective knowledge exchange and acquisition: accelerating policy learning, moved the policy sphere in this area from the legacy of centrally planned agricultural institutional experience of People‘s Commune , towards rather different, internationally common-shared rules for farmers cooperatives: 农民主体，服务农民，自由进出，平等权利，民主管理

Farmers to be the principal

Serve for the farmer

Freedom to entry and exit

Equal rights among members

Democratic Management


Conclusions Institutional entrepreneur as the source of human

action that brings in institutional changes;

It is useful to distinguish between basic institutions and specific institutions; The distinction helps to deepen institutional analysis;

In China after a general transition of economic regime, specific institutional changes are largely, mainly and enormously required in order to consolidate the various facets of the foundation of national innovation system, to be incorporated with a basically changed economic regime;

2014-11-26-28 25 S GU 2014 UNU-MERIT MAASTRICHT

Conclusions A middle-up-down process of policy learning and institutional change

enlightens that for the sake of various kinds of concrete/specific institutional development, the following are highly desired:

=> Assign strategic importance also to middle levels policy makers of the policy hierarchy;

=> Promote, with great efforts, the policy capacity of the middle levels policy makers;

=> Change the role of the top level (from the formation of general, or “one size to fit all” policies), as agenda setter, the coordinator of institutional changes in various concrete parts; keep flexibility for middle levels, meanwhile maintain clear overview of the landscape of institutional strengths and weakness and necessary changes of the national innovation system;

=> A match between the need from institutional changes and the focusing areas and projects of social studies; so as to improve the efficiency of knowledge and understanding development as intellectual support to institutional change and policy learning;


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institutional entrepreneurship and policy learning in china

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