Investment Blocking Problems: Theory And Practice

This disseration develops a theoretical framework on solutions to first-order and second-order holdup problems through an incomplete contract approach after an overview on related literature, and applies this framework to the analysis of Wenzhou model and Sunan model. Wenzhou model and Sunan model adopted different solutions to holdup problems because of their differtnt initial conditions. First-order holdup problems are related to how formal authority is allocated, and different choices on different constraints lead to different first-order holdup problems. Second-order holdup problems are related to how ownership structure is arranged, and different choices under the same constraint lead to different second-order holdup problems. The process of China's reform is a process to find different solutions to different holdup problems, especially in present fortifications-storming stages.