Week 5, Session 1

 Agriculture
o Experiment in agriculture, in 1978 after UN SC meeting leader China, higher goal
than legality
 To get economic development (ok to break law for that reason)
 Experiment as basis for future law.
 With respect to courts, it is often politics that wins.

 Economic zones
o Formalized experiment zones
 But not really quick like in Russia  total collapse
o In china, he had to watch out for the hard-core communist to avoid unrest.
o For example, city near Hong Kong developed quickly as it got skills and capital from
Hong Kong.
 Capital and knowledge necessary from Hong Kong but workers from China
necessary.
 In general, for china, becoming the factory of the world in that way.

 Law Aspect
o What does this mean for Law
 To be sure expropriation does not happen or at least regulated happen.
 Investment law: is an important part for companies that want to invest
 Pollution laws: also importance for investors

 China
o Become a wealthy country, simply that.
 Not so much capitalist or communist country.
o But it still considers itself to be a socialist state.
 So always within a socialist framework
 So system must be uphold in any case (thus media no foreign
investment for example).
 As the economy gets more complex, rent seeking, and here you get the
bureaucracy
 68 million members have to implement rules, often do this only for
personal benefit.
 WTO
o Leaders that took China into WTO.
 Bind the hands of future policy makers  bind to foreign management.
Summary

Clark article  contract law very powerful in improving Chinese economic development confirm of
north

Property less vested in law  but there was more commitment from the Chinese state to protect
property in a similar manner to law. That was at the time good enough for what North says law
should do.

As the economy develop further  revision or evolution of property law

Chen Su: Keep foreign businesses happy.

Angels Gan: bureaucracy becomes part of proceedings. It is necessary to see how bureaucracy
functions  look at these processes to understand implementation of law.

Week 5, Session 2

 There is a law for workers rights, but this law is not being followed
o Employers circumvent problems by making sure the law does not apply.
o Also, no access to court (money issues)
o Employers have more resources  can hire lawyers because they have more power.
 Collectivist action not allowed  Leninism (disciplined)
o Thus, no way to improve the power of employees
o Chinese government has national/provincial/district/local levels  every level has
one leader.
 Local governments oversee local court funding.
 This creates a situation where local courts for their functioning are
dependent on the goodwill of local governors.
 Thus, one does not rule against local interest. Thus, one takes the
side of employers.
o Go through mediation/arbitration  mutually agreed settlement
 Anti-corruption committee etc.  lower level officials behavior is not good.
 Local protectionism  effects judicial practice.
 Labour union, will help companies help manage their employees 
you will have an issue on implementation
o Do employee rights actually exist?
 Hukou system actually manages citizen movement. School etc. only in that
location!
 For that reason, you have millions that are “second-class citizens”.
 So many simply do not have any rights.
 The Labor Union is slinking
 More expensive to have children  economic insecurity.
 Thus, low-paid wages jobs are declining. This resource is for a
considerable part spent.
 Wages go up a lot now in china with this labor scarcity
o Also, a lot of automatization.
Summary

Poor implementation of laws due to difficulties for NGO to organize/money scarcity/courts with
loacal governments/law and policy is biased against interest of employees (houkoo)  outgrow of
tactics China to grow its economy.

Growing put on the shoulder of the labour force  but as the structure of the economy/labour force
changes  salaries go up and little more bargaining power for employees. Differ from sector to
sector though. There you see automation actually happens. These results will show the

Week 6, session 1

Article Robinson:

 Oligarchy
o Also, oligarchy is not equally divided through the country. In the rural areas the
oligarchy is far worse, so in the traditional areas.
 Rich have access to information, poor do not
 If you have projects, then you can get rich, thus oligarchy worse in the
poor/rural areas
 Middle class
o Political demand: the nature of middle class is ethnic Chinese. The consequence is
that the Chinese did not actually call for liberal policies.
 Just like Jews in Europe, ethnic Chinese had no political real power.
 After Suharto, with raping of Chinese, middle class did actually
become more active.
 Recently governor of Jakarta was set-up. He was a local who actually
got a high position and fought corruption. Anti-Cristian card was
played, accused of blaspheme.
o Movement supported by oligarchs. They removed him.

 Democracy
o You need parties
 They should represent the will of the population
 However, in Indonesia all want the same thing  economic growth.
 No left parties: half million communist all killed (1965+1966)

 Islam
o Identity politics
 Values of who you are  religion
 Not pushing for redistribution of wealth
  Lawyers & Oligarchy
o In court

Week 6, Session 2

 If courts are not somehow acting according to rules, they will not legitimize the system as a
whole. That in the end the rich always come ahead.
Notes for exam

Modernization theory: Soeharto and post soeharto regime very different development.
Modernization theory does to some extend hold true for Indonesia. The state-centered part of the
modernization theory held true for Indonesia. Social justice for all Indonesia also shown that there
was an increase in the rule of law. Therefore modernization theory held true at that time. After
soeharto the modernization theory did not hold true. There was now more corruption. The oligarchy
increased at that time.

A: relation modernization theory and economic growth  applying the theory to a case study. The
role of the state has not diminished after the fall of Suharto!! Policy is done at a lower level not at a
central level. About corruption, the corruption index is actually improving but you have to be careful
what part in Indonesia is actually improving. C2: The role of corruption became different in China.
Corruption has NOT become worse or better however it simply changed. There is an anti-corruption
commission. And in some areas, it is less corruption, definitely as under Suharto.

Institutional economics in China Indonesia

Developmental state theory: catch up as a first step.

A: Rule of law impact on the developmental state. C2: Economic relation sphere has developed and
resulted in more law. In china law is not the skeleton that supports the state, however, it is
important.

Constitutionalism: not so much enforcement