We consider an economy where competing political parties alternate in office. Due to rent-seeking motives, incumbents have an incentive to set public expenditures above the socially optimum level. Parties cannot commit to future policies, but they can forge a political compromise where each...

The author focuses on Communist Party-management relations in large and medium-scale Chinese industries since the early 1980s. Analysing these relations in the context of current economic and political reforms, he explores the major problems, the policies that have been pursued to resolve them,...