Book description from forthcoming Chinese edition
In the late 1970s, China was poorer than Bangladesh, Malawi, Chad. Today, while these “bottom-billion” countries are still struggling to escape poverty, China has leapt far ahead, transforming into the world’s second largest economy. How did it achieve this great transformation within a short span of forty years? What lessons can China’s experiences offer to other developing countries?
Drawing on complexity and systems thinking, How China Escaped the Poverty Trap advances an original, paradigm-shifting set of answers. Challenging conventional linear theories of development (either “fix governance first” or “stimulate growth first”), Yuen Yuen Ang argues that development is best understood as a process of coevolution between states and markets.
The first step of this process, she reveals, is to build markets using normatively weak institutions. More importantly, “directed improvisation”—the paradoxical mixture of top-down direction and bottom-up improvisation—provides the necessary environment for effective adaptation to occur. China represents an authoritarian variant of directed improvisation that manifested within the party-state, in which Beijing directs and local governments improvise, but the principles of directed improvisation can be actualized in many contexts.
Extending her analysis of China to the late medieval Europe, 19th century America, and Nollywood in Nigeria, this book upends the conventional wisdom and one-size-fits-all policies in development, offering these new insights and features:
- Use what you have, not what you want: At start-up stages of development, harness normatively weak institutions to build markets, rather than import best practices from already developed economies.
- Directed improvisation: Effective adaptation doesn’t automatically occur; it requires the creation of an enabling environment.
- Enabling adaptation involves tackling three generic organizational problems: How to strike the right balance between variety and coherence? How to clearly define and reward success? How to create complementarities among unevenly endowed members of a system?
- China’s development is more than just rapid economic growth, but has produced three distinct patterns: simultaneously incremental and broad changes, bold and corruption-prone officials, uneven development across regions.
- Process tracing of the development history of localities in coastal and inland China, paired with comparative-historical analyses.