Bringing market transition theory to the firm

Abstract

Market transition theory has specified general mechanisms to explain change in the balance of power between political and economic actors in transition economies. These mechanisms drive the endogenous construction of informal institutions of a market society; moreover, it is within the context of an ongoing change in relative power that the formal institutions of the emerging market economy arise. The theory makes clear predictions on the declining value of political capital as a consequence of progressive marketization, which incrementally results in transformative change in the direction of more relative autonomy between the political and economic spheres, not dissimilar from established market economies (Kornai, 1995; Evans, 1995; Nee, 2000; Lindenberg, 2000; Ricketts, 2000). In sum, the predicted change in relative power between redistributors and producers explains not only bottom-up entrepreneurial activity, but also the emergence of a market economy in departures from state socialism.

Citation

Nee, V. and Opper, S. (2009), "Bringing market transition theory to the firm", Keister, L. (Ed.) Work and Organizationsin China Afterthirty Years of Transition (Research in the Sociology of Work, Vol. 19), Emerald Group Publishing Limited, Leeds, pp. 3-34. https://doi.org/10.1108/S0277-2833(2009)0000019004