Market, Organization And State: An Analysis Of An Organization ACFIC's Dual-Agent Function In Chinese Institutional Game

In reality, Chinese institutional transformation has made great progress in theway of the "experimental" approach in opposition to shock therapy in the formerUSSR and east Europe. This is the common answer for Chinese institutionaltransformation. But how can this approach work in china but not in former USSR andeast Europe? This paper attempts to explore the underlying logic of institutional transaction inchina in the field of private economy and its social power. On analyzing theconstitutional institutional change process for private property right and politicalinstitutional change for the entrepreneurs to enter the party, we raise the hypothesisthat the organization ACFIC (All-China Federation of Industry & Commerce) playsone dual-agent function in the institutional changes for the property right and politicalsystem. According to the theory of Washington Consensus, institutional gamebetween state and society in the socialist countries should be non-cooperative game.But by acting as an agent of the state and an agent of the new social power, ACFICprovides the institutional change one way to realizing cooperative game and reducethe change cost. The paper tests the hypothesis on the ACFIC`s history between the SocialistTransformation of Capitalist Industry and Commerce (1953-1956) and the functionsafter 1978`s reform period.