Historicizing China’s 1980s Reforms and the Neoliberal Moment
4: The Economics of China's Reform: Academic Discipline versus Policy Practice
Friday, March 25, 2022
11:30am – 1:00pm EST
Virtual Paper Presenter(s)
University of Massachusetts, Amherst, United States
China's economics discipline has been completely transformed in the course of the last forty years and now largely conforms with the global mainstream. China’s actual economic policies and governance however, substantially diverge from dominant free market economics. This is a puzzle, since most theories of economic change argue that in periods of transition, \we should have seen a new policy paradigm that captured both academic economics and policy making. This paper traces the origins of this tension to the first decade of Reform and Opening. At the dawn of Reform, economics was reinstated in Chinese universities after being banned as a bourgeois discipline during the Cultural Revolution. In the 1980s, economics was transformed from Soviet Marxist economics to neoclassical economics. Extensive exchanges with leading American economists involving the Ford Foundation, the World Bank, and others resulted in the restructuring of the economics curriculum and research. However, despite this transformation of academic economics, Chinese officials diverged from key recommendations from mainstream economics. In particular, China did not pursue “shock therapy” but instead marketized in a state-led fashion, using the old planning institutions as market creators in core sectors while liberalizing the margins of the system. This created a new kind of economic policy making that conditioned the logic of bureaucratic decision making. The boundaries of marketization have been constantly renegotiated but academic economics and policy practice has never truly converged.