Here’s an interesting piece reviewing a book that addresses how China “escaped the poverty trap.”

What has happened in China over the last few decades is truly extraordinary. In 1981 almost 90% of China’s population lived in poverty, making less than $2/day. By 2012 that number had plummeted to less than 7%. From 1990 to 2000 per capita income in China increased by 500%. From 2000 to 2010 it increased another 500%. In only 20 years China went from being extremely impoverished, to being a “middle income” nation, fast approaching “First World” status. This may be the most amazing economic turnaround in world history (even as it has come with a lot of growing pains).

I found it interesting that this analyst attributes China’s success in part to “a highly decentralized system where local government officials have a fair degree of autonomy to choose their strategies.”

The main argument for decentralized governance is that it creates opportunities for competent individuals to pursue political leadership, for societal groups to invest in building political parties, or for existing subnational governments to adopt innovative policy solutions.

This won’t come as a surprise to the economists who have long argued that organic economies are too complex to be centrally managed and that economic plans are best made by the many, not by the few.


11 comments on “Decentralized

  1. Ed says:

    While I’m in favor of decentralized governance when it comes to our economy, I don’t want it to be at the expense of our environment or corruptness as it has with China. I see media coverage of the horrible smog conditions covering large swaths of China to the adulterated toothpaste, laminate flooring and everything in between flooding from their country to ours and it scares me. China has grown exponentially these last couple decades but I wonder if they will die off just as quickly.

    Liked by 1 person

    • Bill says:

      The corruption and environmental degradation are probably inevitable consequences of industrialization, which is itself probably an ugly necessary step toward sustainability. Sustainable economies are, in my opinion, post-industrial. In the meantime, you can have a corrupt environmentally degraded economy like the USSR had or a corrupt environmentally degraded economy like China’s.


      • Joanna says:

        It is easy to demonise what we don’t know. There must be a degree of centralisation in their policy guidelines I think to have got this far without falling apart. It would be interesting to know what goes on behind the scenes. I think the tone seems to come from the top. One interesting point is their rise to take on the leadership in the world that America seems intent on dropping and they are doing it by leaping forward in terms of embracing green energy to combat such smog etc. It is easier when the economy is centrally directed and it will be interesting to see how far they go down the line with that. If they do… America will be left floundering in its addiction to oil.

        Having said all that I do not agree with their stand on human rights etc. but I think that the developed world in general is not so squeaky clean as they like to project either. Interesting times


      • Bill says:

        Thanks for the comment Joanna. I found the piece interesting, but I have to say I didn’t see anything in it that I would characterize as demonizing. Yongmei Zhou is the Chief Economist at the World Bank and Yuen Yuen Ang is a professor of political science with a Ph.D. from Stanford, who is herself Chinese, so I think it’s likely that they understand the subject pretty well.


      • Joanna says:

        I didn’t mean that the article demonises, it was more a general comment on the fact we often demonise what we don’t know. China is treated with disdain for being communist and sometimes we can’t see past that. It will be interesting to see how they progress


  2. Yes. Succinctly explains to me why I’ve always been against Big — government, business, agriculture, corporations, universities, churches, cities — add your noun here. 😊Thanks.


  3. Annie says:

    Sounds a little like the New Hampshire form of government that I’m still trying to figure out as a “come-here.” Town meetings where citizens practice a form of home rule is prevalent in New England. It is fascinating!


  4. NebraskaDave says:

    Bill, When the constitution was written the main responsibilities for the Federal government was to protect the country and to deal with foreign affairs. Some thing happened along the journey of two and a half centuries. I’m all for governing decisions being made as local as can be.

    Have a great local day.

    Nebraska Dave
    Urban Farmer


    • Bill says:

      I’m persuaded that localized community-based economies are the best for communities and the environment. In China’s case it seems that the decision to give some economic autonomy to local governments (rather than trying to centralize economic decision-making) has been a significant factor in their success. I think that’s been true in our country as well.


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