China Research Workshop 中国研究讲座 RSVP
Friday, February 14, 2020 | 2:00-3:30 p.m. | GPS 3106

From Click to Boom: The Political Economy of E-Commerce in China

Presenter: Lizhi Liu, Assistant Professor in the McDonough School of Business and faculty affiliate of the Department of Government, Georgetown University

A central question in political economy asks: how do developing states build market-supporting institutions (e.g., secure property rights, contract enforcement, and the rule of law)? Too often, political obstacles prevent developing states from adopting strong formal institutions. I propose that China has devised a novel solution to this political problem: institutional outsourcing. I argue that, with weak rule of law, the state has outsourced part of its institutional functions to key private actors, which I call, private regulatory intermediaries (PRIs). Using as the context China’s e-commerce market, where 514 million active users generate more than 70 million transactions per day, I show that online trading platforms (e.g., Alibaba’s and have begun to serve as PRIs. More specifically, platforms privately supply market-supporting institutions to enforce contracts, prevent fraud, and settle disputes. Not only do platforms enforce rules, they also assist the state in creating and reforming formal institutions through institutional experiments. I demonstrate that institutional outsourcing is a more politically viable solution to market failure and governance deficit than the direct reforming of formal institutions. I further argue that institutional outsourcing, as an alternative route to institutional development, is potentially generalizable to other developing countries. This talk is an overview of my research on China's e-commerce market. In the talk, I will discuss how and why China's e-commerce boom is not merely a technology shock. Rather, the rise of China's e-commerce market has brought profound economic and institutional changes in China.


CRW provides a forum for the presentation of original research by China scholars from around the country in social science and humanities, sponsored by the Fudan-UC Center on Contemporary China. To view archive and upcoming workshops list, visit:
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