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This paper develops a new framework with which to analyze and understand institutional change. At the heart of the model is a clear distinction between organizations and institutions and a focus on the relationship between organizational and institutional change. In the second half of the paper, the framework is used to open a window on the process by which the institutions of economic governance have begun to change in contemporary China. [ABSTRACT FROM AUTHOR]

This paper is an analysis of the process through which a completely new set of business associations have emerged in China over the past two decades. At the end of the 1970s, China's organizational landscape was marked by a nearly complete absence of associations. During the 1980s and 1990s, as part of an effort to reform the economy and the state administration, state officials and agencies set up a large number of business associations. Although in the years immediately following their creation these associations possessed only an embryonic sort of existence, by the beginning of the new millennium a large number of business associations had evolved into distinct and increasingly active and influential organizations. Some associations operated essentially as subsidiary organizations of a government agency, while others had come to possess a measure of de facto independence from the government. This paper develops a new framework for the analysis of the process of organizational evolution and uses it to shed light on two questions. First, why and how have Chinese business associations emerged and evolved from empty shells into real and active organizations? Second, why have these associations evolved in different ways with regards to their relationship with government organizations? These questions are explored through a detailed analysis of two illustrative cases: the China Construction Industry Association and the China Chain Store and Franchise Industry Association. The case studies reveal how government agencies have engineered a transfer of resources to associations, in the process helping to create a new set of "hybrid organizations" standing between state and society. The process of associational evolution sheds light on several aspects of the institutional transformation of the Chinese political and economic system. The paper concludes by arguing that to understand fully this transformation, scholars must recognize the existence of a "third realm", an expansive realm of activity located at the interstices of state and society. [ABSTRACT FROM AUTHOR]

This paper rethinks the patron-client concept to explain changes in state-business clientelism in China’s market economy. Extant studies of state-business clientelism in China define, explicitly or otherwise, patron-client ties as face-to-face gift giving interactions. While such a concept fit communist-era interactions between citizens and cadres in bounded villages and work units it does not capture the expansive possibilities for clientelism as a business strategy in the market economy. Analysis of Yuanhua Group activities, a private firm at the center of a huge smuggling operation, illuminates innovations in state-business clientelism generated by the growing economic and social capital accumulation of private entrepreneurs. Beginning with personalized gift giving to cultivate patrons in state agencies, the Yuanhua Group subsequently developed through innovative cultivation techniques of routinization, delegation, distancing, and suborning. By reducing the entrepreneurial time investment in cultivating patrons, these innovations enabled the clientelist web to expand. The suborning technique is especially significant as it moves beyond gift-giving to seek bureaucratic integration of a local state agency with the private firm’s operations. [ABSTRACT FROM AUTHOR]