This paper uses a national survey of 200 Chinese town and village enterprises (TVEs) from 1985 to 1990 to explore empirically the effect of contractual arrangements on the performance of enterprises under Chinese institutional conditions. A theoretical model that emphasizes a potentially...

In advanced industrial economies it is accepted that efficiency requires aligning managerial autonomy in decision-making with managerial incentives. Should this hold for economies like that of rural China where (at least until very recently) managers might abuse autonomy and government owners...