Over the past decade, the ownership and control of China's corporate sector has finally begun to depart fundamentally from patterns typical in the socialist past. Students of corporate governance have watched these changes with an intense curiosity about their impact on firm performance. Students of comparative economic institutions have examined them for hints of a new variety of Asian capitalism and have sought to anticipate China's international competitiveness and impact. But these changes potentially will create a new corporate elite with greater compensation, personal wealth, and independence from government agencies than ever before. This transformation of China's political economy may eventually alter the Chinese state itself, although the extent and nature of this change are still far from clear. The key questions of interest are the social origins of the new elite, the scale of the economic assets they control, and especially their continuing relationships with party and government agencies. The answers will vary decisively by sector, four of which are described here: a state-owned sector, a privatized sector, a transactional sector, and an entrepreneurial sector. The evolving mix of these sectors will determine the future contours of the Chinese corporate economy.

Governments confront difficult political choices when they must determine how to balance their spending. But what would happen if a government found a means of spending without taxation? In this book, Gene Park demonstrates how the Japanese government established and mobilized an enormous off-budget spending system, the Fiscal Investment Loan Program (FILP), which drew on postal savings, public pensions, and other funds to pay for its priorities and reduce demands on the budget.

Although other governments have operated systems of policy finance, none have approached the Japanese system in size or been structured to deliberately relieve pressure on the budget so that it could remain balanced and low-tax. Park lays out a compelling puzzle leading us to ask why and how the Japanese created this system, why and how it was allowed to grow to such immense size, and then why it has begun to be reformed and wound down.

-Leonard Schoppa, University of Virginia

[P]rovides a compelling rationale for FILP's importance in Japan's postwar political economy. . . . [N]o one has brought to bear the sustained focus, historical scope, or analytical rigor that Gene Park has with this book.

-William W. Grimes, Boston University

Park's book argues that this system underwrote a distinctive postwar political bargain, one that eschewed the rise of the welfare state and Keynesianism, but that also came with long-term political and economic costs that continue to this day. By drawing attention to FILP, this study resolves key debates in Japanese politics and also makes a larger point about public finance, demonstrating that governments can finance their activities not only through taxes but also through financial mechanisms to allocate credit and investment. Such "policy finance" is an important but often overlooked form of public finance that can change the political calculus of government fiscal choices.

Gene Park is an assistant professor in the Department of Political Science at Baruch College. He has also been a Shorenstein Fellow at the Walter H. Shorenstein Asia-Pacific Research Center, and a visiting scholar at the Japanese Ministry of Finance's Policy Research Institute. He was also the receipient of a Fulbright IIE fellowship. He has a PhD in political science for the University of California, Berkeley.