Private Business under Authoritarianism: Party Organizations, Associations, and Entrepreneurs in China

Abstract

In governing their economies, authoritarian regimes are faced with a simple dilemma. As the primary source of innovation and growth, autocrats rely on the private sector to meet their economic development goals. At the same time, the accumulation of wealth and resources by actors outside of the regime empowers them with ability to mount political challenges in pursuit of their own interests. To manage this tension, autocrats must devise strategies that balance between fostering a sufficiently liberal business environment and mitigating threats to their control; they must essentially choose between methods that monitor, co-opt, or repress. How do authoritarian regimes select and implement such strategies? This dissertation is an investigation into how this process has unfolded in China under the Chinese Communist Party (CCP) since the private sector's reemergence in 1978. I argue that the CCP has drawn from its historical experience as a Marxist-Leninist party to pursue a strategy of governance that monitors and co-opts private business, rather than represses. It has developed a strategy of constructing pervasive, institutional linkages with firms that serve to build its presence widely throughout the private economy. These institutions are 1) grassroots Party organizations, established within firms themselves, and 2) business associations, which also host Party organizations. Over the course of seven chapters, I trace how the Party developed this strategy. I utilize an original panel dataset of annual business association filings, field interviews with private entrepreneurs, historical documents, and an analysis of twenty years of survey data to illustrate the causes and consequences of the Party's approach to governing private business. In Chapter 2, I develop my main theory concerning the evolution of linkage institutions as tools for governing the private economy in China. I explain how the Party evaluated the threat of entrepreneurs over time, and the reasoning behind their strategy of governance. I develop the idea of `controlled liberalization' to explain the timing of their changes in strategy. Chapters 3 and 4 address the role of business associations in China's political economy. I explain why they remain stymied in their development until only recently and show how their recent liberalization has served to bring more firms into contact with the Party. Chapter 5 presents findings from my field research in Guangzhou and Shanghai. Surprisingly, I show how the Party has been successful in convincing greater numbers of entrepreneurs to voluntarily comply with the Party building campaign by reimagining and propagandizing new roles of grassroots Party cells and committees. Chapter 6 validates my historical claims about threat perception and entrepreneur's willingness to engage with linkage institutions by drawing from twenty years of survey data. The final chapter concludes by summarizing the implications of the CCP's approach and projecting future developments for China's private economy.