Person:

Whyte, Martin

China's post-1978 market reforms were accompanied by a drastic decline in the coverage of the Chinese population by medical insurance as well as by sharp increases in charges for medical treatments, tests, and prescriptions. Since the 1990s, these trends have produced widespread condemnation of the current Chinese medical care system for being too costly and unequal. This article attempts to answer two questions: 1) Why did changes in the healthcare system precipitated by market reforms not lead to the kind of deterioration in the health of Chinese citizens that market reforms produced in Eastern Europe and the former Soviet Union? 2) In view of the increased inequalities in access to, and insurance coverage for, medical care since 1978, and particularly the growing rural-urban gap, why do Chinese villagers and migrants rate their current health better than do urban citizens?

China's leaders often claim that the rising tide of mass protests in recent years is primarily driven by popular anger over the widening gap between rich and poor. However, in a series of national surveys that I helped direct, it becomes clear the average Chinese citizen is less angry about current income gaps than citizens in many other societies. There also is no clear increase in such anger over time (despite a sustained rise in income inequality). The primary drivers of popular anger lie elsewhereprimarily in power inequalities, manifested in abuses of power, official corruption, bureaucrats who fail to protect the public from harm, mistreatment by those in authority, and inability to obtain redress when mistreated. China's leaders have done an impressive job in recent years of addressing poverty and material inequality, thus keeping the distributive injustice social volcano dormant. However, they have so far been unwilling or unable to make fundamental reforms to address procedural injustices. Unless they can provide Chinese citizens with more effective protections from the arbitrariness and abuses of entrenched power, a shared sense of injustice will persist, and this active volcano will continue to smolder, with the potential to erupt and threaten Party rule.

China's stunning economic performance for the past three decades was not only unexpected but contradicts much received wisdom in the study of development. Four paradoxes posed by China's record are critically examined: (a) China's traditional culture and institutions as obstacles to development; (b) the necessity of big bang comprehensive reforms to transform a centrally planned economy into a market economy; (c) the perils of state-directed economic development (especially when the state is composed of lifelong communist bureaucrats); and (d) the necessity of getting the institutions right in order to foster development, particularly by establishing secure private property rights. Reasons why China was able to defy expectations and the received wisdom and develop so successfully are discussed. The Chinese case indicates that countries cannot succeed at development by a standard cookbook approach but must tailor their development policies and institutions to their distinctive history, potentials, and limitations.