China's rapid economic growth during the past two decades has occurred without the systematic privatization programs once urged upon the former Communist regimes of Europe and the USSR. Some observers have argued that this shows that changes in property rights are not important in reforming a command economy; others insist that in China a façade of public ownership hides a variety of ownership forms that are essentially private in nature. This volume seeks to adjudicate these opposing views by clarifying conceptually and factually the pattern of property rights changes in the contemporary Chinese economy.

The contributors to this volume, from the fields of anthropology, economics, political science, and sociology, have all conducted fieldwork in China on specific economic sectors or enterprise types. Working with a common definitional framework derived from the work of the institutional economist Harold Demsetz, they seek to establish which actors exercise what kinds of rights in practice over what kinds of economic assets, documenting changes through time. Most of the essays examine the rural industrial economy - the fastest-growing sector - or the "spin-off" economic enterprises and activities of public enterprises and institutions.

The research presented in this volume supports several specific conclusions. First, industrializing rural regions have emerged with diametrically opposed property rights regimes: in one kind of region public ownership only marginally different in form from that of the Mao years has predominated; in other regions wholly new forms of private household and foreign-funded enterprise have arisen. Second, the regimes of all the examined regions and sectors have evolved continually since the outset of reform, and in recent years change has accelerated because of the increased pressures of competitive markets. Third, in the evolution of property rights the distinction between public and private is not crucial in differentiating the key arrangements; instead, a more finely differentiated set of gradations from "public" to "private" prove central to the story of the Chinese economy.

Since 1992, the Japanese economy has been utterly stagnant, with signs of weak performance at every turn. Since 1997, Japan’s economy has experienced negative growth, a situation unprecedented in the postwar era. Most large Japanese corporations have engaged in extensive restructuring during this period, which has in turn contributed to 4.8 percent unemployment—higher than rates in the United States. Further, in 1998, the closure rate of small companies (3.8 percent) exceeded the start-up rate of new business ventures (3.7 percent).

This grim scenario has not always existed. Japan once fostered phenomenal growth, from the smallest of ventures to the largest of multinational companies. As is evident in organizations such as Sony and Honda, Japanese entrepreneurship once led the world in innovation. In the 1990s, however, this torch has passed to the U.S. economy, which has enjoyed an extraordinary boom, due in large part to Silicon Valley venture businesses. Why have Japanese entrepreneurial activities, formerly so robust, lagged behind?

In asking this question, other questions arise. Despite the present business climate, how can Japan revive its economy? How can it absorb its unemployed workers? Most important, how can Japanese entrepreneurship again take the lead, and restore the country’s economic health? This paper seeks to address these issues.

Published as part of the "Silicon Valley Networks" Research Project.

Reprint from Robert A. Pastor, ed., A Century's Journey: How the Great Powers Shaped the World (New York: Basic Books, 1999).

This study seeks to understand the conflict and tension arising from a territorially divided nation with a strong legacy of ethnic homogeneity, using the Korean case for consideration. In doing so, the authors rely on a recent development in social identity theory to explore the dynamics and conflict inherent in intra-group social identification.

A one-day conference organized by Shorenstein APARC brought together 110 distinguished participants from India, the United States, Israel, Taiwan, Europe, and Latin America. The program's objective was to inform and educate India's information technology policymakers and practitioners on India's enabling environment with respect to regulation, governance, access to capital, and technological capabilities. These are the proceedings of this conference, prepared by Dr. Rafiq Dossani.

In recent years, India has made good progress in the export of information technology software and services. Many other countries now look to it as a model. At the same time, India's concentration of low value-added services, the near-absence of technology development, and the total absence of hardware development suggest that IT exports are not fulfilling their potential, either in terms of innovative content or of possible sustainability. The Indian government has set aggressive targets for the high technology industry, including an annual export growth rate of 33 percent for the next decade, compared with 50 percent over the past five years. These goals will translate to substantial dollar increases in software and IT services exports: from $3 billion in 1998 to $50 billion in 2008. Can this ambitious figure be achieved? Or, perhaps, is it too low, given India's current growth trajectory?

Why Poor Countries Are Becoming Richer, Democratic, Increasingly Peaceable, and Sometimes More Dangerous

It is easy to be confused about the world’s prospect. On the one hand, since the collapse of the Soviet Union and its empire, many millions of people have been freed from economic and political shackles that had long kept them under authoritarian rule and in poverty—or at least far poorer than they should be. On the other hand, several parts of the world are beset by political turmoil and conflicts, rapid population increases, and falling incomes.

North Korea has recently exhibited some noteworthy changes. In September 1998 it amended its constitution to change the power structure and introduced a number of progressive clauses. It also began to use the slogan “A Strong and Prosperous Nation,” which emphasizes eco- nomic prosperity as well as political, ideological, and military strength.

There are two conflicting views among North Korea watchers regarding these changes, together with some other recent changes in relations between the party, military, and govern- ment. One view is that the new constitution can be characterized by the distribution of au- thority and power. According to this view, North Korea is now trying to institutionalize the ruling system, ending Kim Jong Il’s personal rule. Technocrats will take more responsibility for running the economy. Constitutional clauses regarding the economy also aim to provide legal and institutional bases for reform and opening to the international community. This view regards the slogan “A Strong and Prosperous Nation” as North Korea’s declaration of its intent to focus foremost on economic development rather than the military and ideology. According to the other view, on the other hand, the new constitution only institutionalizes and strengthens the military rule that has persisted in North Korea for the last several years. This view suspects that the distribution of power reflected in the new constitution is nominal and that constitutional change regarding the economy is nothing but acceptance of change that has already taken place in North Korea. Therefore, the closed system will be maintained. During the last several years, particularly since the death of Kim Il Sung, there has been debate regarding the relationship between the party, military, and government in North Ko- rea. Does the enhanced status of the military increase its role in North Korea’s general deci- sion-making? Is the role of the party decreasing in the face of the rising role of the military? Is the role of the government also changing? Finally, do the changing relations between the party, the military, and the government affect North Korea’s policy direction?

The purpose of this paper is to analyze the changing relations between the party, military, and government, and their impact on policy direction in North Korea.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

In this incisive analysis of one of the most spectacular economic breakthroughs in the Deng era, Jean C. Oi shows how and why Chinese rural-based industry has become the fastest growing economic sector not just in China but in the world. Oi argues that decollectivization and fiscal decentralization provided party officials of the localities--counties, townships, and villages--with the incentives to act as entrepreneurs and to promote rural industrialization in many areas of the Chinese countryside. As a result, the corporatism practiced by local officials has become effective enough to challenge the centrality of the national state.

Dealing not only with the political setting of rural industrial development, Oi's original and strongly argued study also makes a broader contribution to conceptualizations of corporatism in political theory. Oi writes provocatively about property rights and principal-agent relationships and shows the complex financial incentives that underpin and strengthen the growth in local state corporatism and shape its evolution. This book will be essential for those interested in Chinese politics, comparative politics, and communist and post-communist systems.

The currency crisis that started in Thailand in the summer of 1997 was followed by repercussions on the currencies of neighboring countries, culminating in a crisis infecting most countries in East Asia. Japan and China, which have developed strong ties with the rest of Asia through trade and investment, have not been exempted from this contagion. This paper looks at the latest currency crisis in Asia from the perspectives of these two regional giants.