In this fascinating monograph, Scott Kennedy explores the nature of state–society relations through the lens of business lobbying. He begins his work by criticizing existing approaches in comparative politics, which often try to fit various countries into a few standard models of state–society relations: pluralism, corporatism, clientelism, and monism. Given the complexity and dynamism in China's economy, Kennedy makes the astute observation that no single model suffices to describe the complex business–government relations in China. As he puts it succinctly, “countries do not just have one political economy, but multiple political economies” (p. 160).
This work adds momentum to a new wave of studies that makes the point that Western obsession with a few signs of democracy has led to a neglect of the giant sea change occurring in China. Instead of focusing on a few exotic specimens of flowers, these studies—works by scholars like Dali Yang (2004) and Bruce Dickson (2003)—provide strong evidence that a forest has grown up in the meantime. Kennedy's work fits squarely in this literature that challenges the traditional ideal types of state–society relations. According to this author, although business associations do not generally have autonomy, they nonetheless manage to influence government policies in a variety of ways.
Kennedy then makes an innovative theoretical turn by focusing on firm and sector characteristics to explain the variation in lobbying activities in steel, consumer electronics, and the software industries. These characteristics include firm ownership, firm size, profitability, organization, geographical location of production, ownership of the sector, economies of scale, firm concentration, production intensities, level of pollution, product homogeneity, and price elasticity. Instead of focusing on ideal types, he moves the discussion forward by examining the causal effect of these variables. His material reveals that these firm characteristics are clearly important. Here, however, the reader might appreciate a better specified causal framework that links these characteristics to various specific outcomes. Although there are quite a few variables that might matter, a few seem especially relevant, given what we know about lobbying and cartel formation, two outcomes to which Kennedy pays special attention. For example, Olson tells us that a concentrated sector with a few large players tends to lobby more successfully and has greater ability to form cartels, while lower price elasticity of demand increases the success of a cartel (1965, 25–26). A focus on these two variables may generate a lot of explanatory mileage in the three sectors.
There are very few people in the China field who have conducted the same depth of field research as Kennedy. Without a doubt, the hundreds of businessmen and government officials he interviewed gave him unparalleled insights about business lobbying in China. For example, his discussion of the State Economic and Trade Commission's (failed) attempts to form multiple cartels during the deflationary period of 1997–98 reveals the messiness and contingencies in economic policymaking in East Asian developmental states. This account stands in sharp contrast to the usual picture of efficient and cooperative policymaking in East Asia. This account makes us wonder whether policymaking had been equally contentious in other East Asian countries. Theoretically, this tells an interesting story in which price elasticity of demand in a sector trumps both sector concentration (as in the electronics industry) and government coordination (in both steel and electronics). For this reason alone, The Business of Lobbying in China is an indispensable read for students of contemporary Asia.
Given this wonderful material, one is somewhat puzzled by an obvious gap in the theoretical discussion. For one, this work provides evidence that directly speaks to, if not challenges, the “embedded autonomy” literature, which began with Evans's seminal work (1995). First, Kennedy shows that association life differs between the three sectors, but there is no clear variation in the level of embeddedness between government and industry. In all three instances, government maintained regular contact with industries. In the dimension of embeddedness, China as a whole does quite well, which perhaps explains its relative success among developing countries, exactly as Evans predicts. One interesting challenge that Kennedy's work poses to Evans is the exogeneity of an embedded state. In the case of the software industry, the government at first seemed uninterested in establishing ties. However, as large international players got involved and as the domestic software industry matured, it seemed highly disadvantageous for the government to remain aloof. Thus, the government began to build institutions to engage the new firms. Kennedy shows a strong tendency for such a “state chasing after society” phenomenon in some sectors. Of course, Evans would respond that the right incentives still needed to be in place to motivate bureaucrats to maintain contacts with rapidly developing industries, but this certainly provides an interesting twist to Evans's argument.
In sum, Kennedy's work is a model of how careful field research can yield insights that challenge conventional frameworks and explanations. It further makes a pioneering attempt to describe and explain the novel forms of state–society relations that confound current conceptualization. This work reminds those of us who study China why we began to do so in the first place. Instead of applying off-the-shelf arguments, the complex and often contradictory realities in China challenge us to deploy existing concepts and frameworks in new ways and to invent new concepts and explanations.
