As China rapidly modernizes, the economic improvements and policy changes have drastically altered the landscape of rural governance. In The Transformation of Governance in Rural China, An Chen provides a persuasive and insightful study on the evolving nature of rural governance in China, based on extensive data. Chen argues that the series of policy changes that started in the 1990s, including the 1994 tax reform, the tax-for-fee reform (TFR), and the abolition of the agricultural tax (AAT), has transformed rural governance by undermining the village cadres' political source of authority. The immediate consequence is not chaos in the Chinese countryside, but rather the emergence of new ruling elites—“entrepreneur cadres.” They use their private wealth and market expertise to help fellow villagers acquire wealth. This is in essence private authority. Although entrepreneur cadres are still appointed and authorized by the party-state, they only serve the regime's interests so long as they enjoy sufficient private gains.

Chen's book contributes to the scholarly debate on the political effects of market transitions, demonstrating that contextual factors, such as village type and village cadres' aspirations, critically shape the outcome of how socialist cadres may benefit at the initial stages of market reform and whether such advantages will endure. Chen draws upon theories from disciplines such as economics, political science, and sociology to interpret the empirical evidence. The book also provides a perceptive discussion of institutional reforms in China, especially on the fate of township governments. It is a timely and important read for scholars of Chinese rural politics, authoritarian politics, and transitional economies.

The erosion of village cadres' political authority in China, as documented in the book, is not unprecedented. In fact, Chen's comprehensive review of rural governance in China from the imperial period reveals that strict control by the central power was not the case until the Communist takeover. The main form of control over the peasantry under Mao was economic control through collectivization. Village cadres had distributive and administrative powers, both of which were closely connected to the highly collectivized village economy. After the market reform, however, the basis for control changed. Decollectivization, marketization, and later policies of TFR and AAT severely undermined village cadres' political authority by stripping away their redistributive power and, to a certain degree, their administrative power.

A perhaps more puzzling question is why the central leadership of the Chinese Communist Party has not reacted in major ways to such a decline of political authority in rural villages. Does this mean acceptance of entrepreneur cadres as a new mode of rural governance, since it seems to be more cost effective? Chen argues that entrepreneur cadres and their methods of rural governance fit into the regime's vision of a post-AAT rural society. Entrepreneur cadres are capable of ruling village affairs. More importantly, they are able and willing to provide help to villagers that the township government is either unwilling or unable to provide. Entrepreneur cadres often help villagers through employment in their private enterprises, lending money, and sharing market information (p. 279). Thus, entrepreneur cadres seem to do their jobs well, mostly based on their private expenses and personal connections. In the meantime, the party-state still strictly controls cadre appointment and attempts to control cadres' behavior.

While this is an important finding based on extensive data, it also points to openings for future research. The emerging ruling elites of entrepreneur cadres is a recent phenomenon that resulted from a series of policy reforms and socioeconomic developments. Is it transient or is it a new mode of rural governance as Chen suggests? An important quality of entrepreneurs is that they understand risk and uncertainty. Gains and losses are both common results of market mechanisms, and such uncertainty is also embedded in the mode of entrepreneur cadres' governance. What might happen when entrepreneur cadres' private enterprises stumble? Would they lose their economic source of authority with villagers? If they were to be replaced by other successful entrepreneur cadres because they lost their ability to help fellow villagers, would this mechanism be too unstable and unpredictable to be desirable for the central leadership?

The Transformation of Governance in Rural China is based on eleven years of fieldwork that produced large amounts of qualitative and quantitative data. The extensiveness of the data and its long time span enable Chen to draw solid conclusions on the changing rural governance in China. The vertical perspective on rural governance in imperial and Republican China and the horizontal comparison with other transitional economies strengthen the argument and provide important contexts. This is an important work that has implications for future institutional changes at the grassroots level and the continuing transformation of the Chinese countryside.