China’s institutional architecture: Interpreting the links between local governance and local enterprises

Reform China poses a challenge to social scientists trying to use their analytical toolkits to explain institutional change and economic transformation. The dramatic change of China’s economic system has stimulated some useful theoretical controversies (Roy et al. 2001; Tsui et al. 2004). In organization theory the controversy started between cultural approaches (e. g. Hofstede 1998; Redding 1990) and institutional theory (Meyer / Peng 2005); in economics between the neo-classical approaches and institutional economics (Lipton /Sachs 1990; Grabher /Stark 1997; Hodgson 1993). Over the years when more “observations” of transformation processes and compatible data sets from European transition economies became available,