Policy Experimentation in China’s Economic Rise

Abstract

Policy experimentation is frequently highlighted as a potent means to facilitate institutional innovation, and avoid reformist leaps in the dark by injecting bottom-up initiative and local knowledge into the national policy process. Yet experimentation remains a surprisingly vague concept in the debate over variants of economic governance. This article contributes to the study of experiment-based policymaking by examining the distinctive tools, processes, and effects of experimental programs in major domains of China’s economic reform. China’s experience attests to the potency of experimentation in bringing about transformative change, even in a rigid authoritarian, bureaucratic environment, and regardless of strong political opposition. Large-scale experimentation stimulated policy learning and economic expansion effectively in those sectors in which political elites could benefit from supporting new types of private and transnational entrepreneurial activity. Conversely, experimental programs largely failed in generating an effective provision of social goods which would require a combination of active societal supervision and strict central government enforcement to make it work. Though the impact of reform experiments varies between policy domains, China’s experimentation-based policy process has been essential to redefining basic policy parameters. At the heart of this process, we find a pattern of central–local interaction in generating policy—“experimentation under hierarchy”—which constitutes a notable addition to the repertoires of governance that have been tried for achieving economic transformation.