Joseph Stiglitz China Towards a new model of development

中國：邁向新發展模式

約瑟夫·斯蒂格利茨*

https://core.ac.uk/download/pdf/161443511.pdf

美國紐約哥倫比亞大學哥倫比亞商學院（最終版本於 2007 年 3 月 18 日收到）

本文認為，中國國情的變化需要中國經濟發展模式的轉變。 由於中國的國情與其他國家不同，中國的模式必然需要與其他國家不同。 文章圍繞中心思想，廣泛討論了出口增長模式、創新、產權、稅收政策、社會保險等有關中國經濟發展的問題。

一、簡介

中國向市場經濟轉型30年來的成功，在很大程度上取決於其戰略和政策的適應性：隨著一係列問題的解決，新的問題又出現了，而新的問題又隨之而來。 必須製定新的政策和戰略。 它也是基於社會創新。

由於中國麵臨的問題與其他國家所麵臨的問題不同，因此必須找到新的解決方案。1並且中國認識到不能簡單地轉移經濟製度（即使這些製度在其他國家運作良好）；它必須要改變經濟製度。 至少，它們必須進行調整。 不僅中國的國情和曆史不同，而且其目標在很大程度上也不同。 這也是中國提出中國特色市場經濟的原因之一。 即使是成功的中國機構也必須隨著時代的變化而進行修改和調整。 鄉鎮企業本身是一種社會創新，對 20 世紀 80 年代和 90 年代初的成功至關重要，但它無法應對中國在全球經濟中日益重要的參與者所麵臨的所有挑戰。

去年，中國在公布“十一五”規劃時重點關注了一些 過去的成功所帶來的問題。 並不是每個人都從前幾十年的快速增長中平等受益。 盡管在減貧方麵取得了巨大成功，但不平等現象卻大大加劇。

對市場的更大依賴意味著在某些方麵，例如健康和教育，一些農村地區的生活水平可能已經惡化。 更廣泛地說，阿馬蒂亞·森 (Amartya Sen) 認為，1979 年時，中國和印度喀拉拉邦的預期壽命大致相同，這對全球失衡影響不大，甚至可能使情況變得更糟，因為這將使美國貿易融資問題變得更加嚴重。 10但中國麵臨著兩難境地：如果它升值貨幣並補貼農民 — — 實際上是抵消美國和歐盟提供的補貼，那麽它將奪走其他發展目標所需的稀缺資金， 包括對教育和健康的投資。

2.1 擺脫出口的替代措施

需要采取其他措施來糾正貿易失衡，但這些措施不會同時拉大城鄉差距。 其中一項措施是出口稅或減少出口退稅，其進一步的優勢是提供可用於其他社會目標的額外收入。

中國的許多出口產品都是能源密集型產品，其社會成本遠遠超出企業承擔的成本。 提高能源價格並征收碳稅和其他環境稅（將在下文進一步討論）將有助於調整經濟結構 — — 包括幫助中國擺脫出口 — — 並再次提供可用於其他社會的額外收入 目標。

2.2 為什麽要出口導向型增長

人們很自然地會問：為什麽出口導向型增長對中國和許多其他東亞國家有效？ 擺脫出口主導型增長是否會對其增長產生不利影響？ 是否有其他方式可以滿足它所滿足的需求？

出口導向型增長之所以重要，有以下三個原因。 首先，它提供了基礎創新。 發展中國家和發達國家的區別不僅僅是資源的差距，更是知識的差距。 正如格林沃爾德和斯蒂格利茨（Greenwald and Stiglitz，2006）指出的那樣，由於多種原因，工業部門規模越大，知識的傳播就越加強。 然後，在該部門學到的技能會逐漸傳播到經濟的其他部門。 其次，出口競爭激烈，競爭催生效率和創新。 成功需要達到國際標準，這也是最終延伸到整個經濟的好處。 第三，在發展的早期階段，生產能力可能超過消費能力，或者更準確地說，超過對正在生產的特定商品的需求的擴大。

雖然許多家庭和企業可能存在潛在需求，但隻有當這些家庭和企業能夠獲得信貸時，這些潛在需求才會轉化為有效需求。 但在發展的早期階段，能夠區分信用者和無信用者以及能夠執行信用合同的金融機構（以及底層的法律基礎設施）往往尚未發展起來。 12 向國外放貸融資更容易 外國人的消費高於國內的借貸。

事實上，中國近年來可以被視為一直在從事供應商融資：它借出了大部分資金，使其他地方的人能夠購買其商品。 但是，當國內有如此多的迫切需求時，中國卻幫助世界上最富有的國家過上入不敷出的生活，14這一點很奇特。

2.3 為什麽今天的中國可以擺脫出口導向型增長

如今，出口拉動型增長所發揮的這些作用可以通過其他方式來實現。 中國正在建立廣泛的創新體係（見下文）； 它已經“學會了如何學習”； 它不需要依賴出口來學習。 中國創造了充滿活力的內部競爭，例如 鄉鎮企業和其他機構之間。 誠然，需要強有力的競爭法來確保國內競爭依然強勁，中國應該對那些主張建立大型“國家冠軍企業”的人保持警惕，至少當這些國家冠軍企業的建立威脅到國內競爭時 。 最後，中國在建立強大的國內金融體係方麵取得了長足進步。 在現階段，擴大國內信貸，特別是住房和抵押債務信貸，是很容易的。

2.4 刺激消費

盡管嘴上說要擺脫出口拉動型增長，但中國的貿易順差實際上已經從2005年的1020億美元增加到2006年的1775億美元。家庭消費增加了，但增幅沒有GDP快。 擴大消費不僅有助於中國擺脫對出口的依賴，而且有助於提高人民生活水平，而發展的目的就是提高人民生活水平。 問題是：為什麽中國儲蓄“過剩”？

有四種假設； 每個都發揮著作用，盡管有些可能比其他更重要。

首先是日益加劇的不平等。 富人的消費傾向通常低於窮人19，不平等的加劇將導致消費占 GDP 的比例降低。 因此，減少不平等程度的政策預計會增加消費。

第二是資本市場的不完善，特別是那些麵臨小企業和小企業的資本市場。

中型企業。 一些數據表明，城市地區小企業的數量有所下降；20 從曆史上看，小企業與就業增長相關。 它們對於為過去沒有機會的人提供新機會尤其重要。 許多人認為，小企業是充滿活力的經濟的核心——雖然大企業將產品推向市場，但它們依賴大量小企業來實現真正的創新。

因此，小企業數量的下降甚至停滯應該引起人們的關注。 小企業衰落的原因之一是缺乏獲得資本的機會。 大型銀行更喜歡向大型企業提供貸款。 在美國，小企業管理局有一項特殊的政府計劃，通過吸收部分風險來鼓勵向小企業提供貸款。 在缺乏資金的情況下，那些渴望成為小商人的人——或者那些已經在小企業做生意的人——必須以非常高的利率儲蓄才能獲得擴張所需的資金。 因此，改善信貸渠道將有助於降低總體儲蓄率。 但增加消費的主要障礙不是缺乏信貸，而是缺乏有效的社會安全網、強大的公共衛生體係、有效的社會保障體係和良好的公共教育。 “預防性”儲蓄抑製消費。

因此，這些改革將產生雙重好處，使中國擺脫對出口（以及變幻莫測的國際市場）的依賴，同時提高生活水平。

儲蓄占GDP比例高的最終原因是經常賬戶高盈餘，以儲備的大量增加為標誌。 2006年，這些金額占GDP的7%。 與此同時，政府保持了強勁的財政狀況。 但正如我們之前指出的，中國已經積累了足夠的儲備來應對市場的任何可能的變化。 鑒於健康和教育方麵的高社會需求 — — 以及較高的私人儲蓄率 — — 中國完全有能力承擔適度的財政赤字（參見 Feldstein 2007）。

當然，可以通過擴大投資來減少對出口的依賴； 但在中國投資率如此之高的情況下，今天的問題不再是投資水平，而是投資配置。 令人擔憂的是，存在著一係列不正當的激勵措施——當地社區紛紛湧入鼓勵投資，既為自己創造就業機會，又增加收入。 尤其是在房地產領域，人們擔心短視投資者隻關注短期資本收益而不是長期回報。

3、創新

新經濟模式的核心是創新——提高稀缺資源的使用效率。 創新是內生的，是研發資源分配和試圖學習如何“在前沿生產或采用有時提出的最佳實踐”的有意識政策的結果。 但與所有資源一樣，用於研究和學習的資源也是稀缺的。 人們可以針對不同的目標進行此類研究。 不幸的是，西方企業的研究過多地著眼於減少勞動力投入，而很少關注減少環境影響。問題在於，創新的社會回報與私人回報不同，這既是因為市場扭曲，也是因為獲得專利的私人回報與社會回報顯著不同。

3.1 對勞動力節約型創新的過度激勵

例如，西方的高工資意味著減少勞動力投入可以獲得高回報。 即使在失業率很高的國家，也會對節省勞動力的技術進行大量投資，從而加劇了失業問題。 對勞動力節約型創新的關注是許多國家麵臨日益嚴重的失業問題的原因。 如果生產率每年增長 5%，那麽產出必須每年增長 5%，才能保持就業不變。

事實上，對於工業部門的企業主來說，失業率上升還有進一步的好處：失業率上升會壓低工資，進一步降低生產成本。 然而，為了實現“和諧社會”，必須創造就業機會以匹配新進入勞動力市場的人。 就中國而言，隨著勞動力從農村向城市遷移，城市創造就業的步伐需要更快。 更高的工資並不是一件壞事：發展的全部目的是增加工人的福祉。

3.2 資源節約型創新激勵不足

出於同樣的原因，由於美國公司不為碳排放支付任何費用 — — 無論全球經濟承受多少成本 — — 他們沒有動力去尋找減少碳排放的創新。 讓企業全額支付其活動的邊際社會成本（例如碳排放成本）將增強減少汙染創新的動力。

此外，碳稅還有另一個重要優勢。 它可能會打破全球應對全球變暖的僵局。 關於這場即將發生的災難的風險的科學證據不斷增加。 英國斯特恩報告（2006 年）提出了一個令人信服的案例，即采取措施減輕風險的經濟效益（考慮到所有風險）超過了成本。 24 京都議定書的排放目標是根據減排量確定的。 1990 年的排放水平。 不幸的是，沒有人提出一套能夠公平、公正地指導排放目標水平確定的、發展中國家和美國都能接受的原則。 由於共同政策的分配後果（每個國家都同意征收碳稅，稅率反映商定的全球碳排放社會成本）要有限得多，因此可能有希望達成全球協議。 25 此外， 對汙染等不良品征稅比對工作和儲蓄等商品征稅更有意義。

3.3 市場經濟創新體係設計的基本問題

然而，市場經濟中創新體係的問題更為深刻。 人們常常認為知識產權是市場經濟創新體係的核心。 但專利製度提供的回報與社會回報並不一致。 創新的邊際社會回報使創新比原本可以更快地實現。 但專利製度將（臨時）財產權賦予第一個發現（或更準確地說，申請專利）創新的人。例如，考慮人類基因組的情況。 曾經有一個國際努力解碼人類基因組。 當一些公司決定嚐試“擊敗”公共資助的項目時，這項努力已經步入正軌。 如果他們比他們領先一小時，他們就獲得了壟斷的所有好處——盡管他們的邊際社會貢獻為零。

但盡管在這些情況下，專利製度帶來的好處為零，但給社會帶來的成本卻是巨大的。 知識是一種公共物品； 知識是“非競爭性的”。 當一個人向另一個人講述一項知識時，它不會減損第一個人所知道的知識。

限製知識的使用是低效的。 但專利製度不僅限製了知識的使用，還賦予一方使用該知識的專有權——它造成了人為壟斷，而壟斷扭曲了資源配置。 就藥品而言，危及的不僅僅是金錢，還有患者本身的生命。 壟斷者可能會收取很高的價格，以致窮人買不起藥品； 數千甚至數十萬人可能因此不必要地死亡，特別是在公共衛生係統不完善的情況下。 由於該基因的專利由於該基因的所有者極有可能患有乳腺癌，因此堅持為每次檢測支付大筆費用。 由此產生的 3,000 美元費用使得這項測試超出了任何沒有醫療保險的人的承受範圍，即使在美國這樣的富裕國家，也有超過 5000 萬美國人沒有醫療保險。 結果是成千上萬的人會不必要地死亡。

與專利製度相關的靜態低效率的巨大成本的唯一理由是可能存在動態收益。 但如果知識產權製度設計不善，則成本將大於收益。 知識產權製度是由一整套詳細的規定來定義的，這些規定描述了哪些內容可以申請專利（或版權）、新穎性標準、專利的有效期、專利的廣度、專利授予的程序以及 質疑和執行機製。

事實上，設計不當的知識產權製度甚至會扼殺創新。 今天美國的擔憂是其知識產權製度正在這樣做。 日益增長的擔憂正在引發一場關於美國知識產權製度改革的激烈辯論。26 至少，美國以外的人們應該認識到，人們從某些企業領導人和政府官員那裏聽到的口頭禪是： 知識產權製度越強大越好——並不反映經濟學家和學術知識產權律師的主流思維，他們並不受雇於從現行製度中獲取大量利潤的公司。

每個國家都必須建立適合本國國情的知識產權製度。27它必須平衡成本和收益； 總體而言，發達國家和發展中國家的做法明顯不同。 這就是為什麽發展中國家在世界知識產權組織要求建立一個以發展為導向的知識產權製度。 我們之前指出，發展中國家麵臨的主要挑戰之一是縮小它們與較發達國家之間的知識差距。 設計不當的知識產權製度可能會讓縮小這一差距變得更加困難。 令人擔心的是，在影響下 許多國家正在采用美國式的知識產權製度，這種製度可能不適合美國，更不適合發展中國家 — — 而且就在美國本身可能意識到需要進行改革的時候 。

精心設計的創新體係由一係列工具組成，包括政府資助的研究（支持大學、專業實驗室甚至企業的研究）、獎項和專利。 獎勵製度提供獎勵——獎勵具有高社會價值的創新成果，例如治療瘧疾等重要疾病，獎勵仿效藥物——但隨後，任何想要獲得知識的人都可以獲得這些知識。 使用它可能需要支付許可費。28當然，

專利製度是一種獎品——扭曲性壟斷權力的獎品。 但是，專利製度的目的是限製知識的使用並提高價格，而獎勵製度則利用市場經濟和競爭的力量，保證知識盡可能低的價格和最大程度的傳播，從而使知識的利益最大化。 被盡可能多的人享受。

中國需要有一個創新體係，與美國體係相比，該體係更加重視獎項和政府資助的研究，而不是對專利的重視，特別是因為創新需要針對廣泛的社會目標，我認為 正如我之前指出的，重點應該是減少環境敏感資源的投入，而不是節省勞動力。

3.5 借鑒其他國家的經驗教訓

但即使是在知識產權製度方麵，中國也應該從美國知識產權製度的缺陷中吸取適當的教訓，這些缺陷在過去的一年裏變得更加明顯，因為我在中國發展的演講中簡要地談到了這些問題。 論壇。 它不需要重複同樣的錯誤。 例如，它需要仔細考慮程序問題（在專利授予之前對其提出質疑），認識到事實上存在導致過度專利的偏見。 私人有強烈的動機去嚐試獲得專利——人們可以將部分公共知識領域私有化； 但挑戰專利可以提供公共利益，將本來屬於私人領域的內容轉變為公開的。 因此，挑戰將會不足； 設計知識產權製度程序可以在一定程度上糾正這種不平衡。還有其他問題涉及專利範圍和“新穎性”標準、什麽可以申請專利、執行程序——“侵權”賠償，即與現行美國製度相反的責任製度、版權期限，31 ETC。

TRIPs 協議規定所有成員國都有義務采用知識產權製度； 但即使在《與貿易有關的知識產權協議》內，成員國也擁有相當大的自由裁量權，中國利用這種自由裁量權來建立適合中國的知識產權製度非常重要。 雖然我在上麵描述了這種知識產權製度設計的幾個特點，但我想提請注意另一個特點：強製許可的使用。 TRIPs 為這些藥物的發行提供了“靈活性”，允許生產仿製藥，其售價僅為品牌藥成本的一小部分。 包括中國在內的大多數國家都沒有充分利用這些靈活性，而這些靈活性可以對本國公民的健康產生如此大的影響。
國家。

4. 建立市場經濟體製

對創新體係的簡短討論闡明了中國發展新模式的幾個重要主題。 首先，這一新模式的成功需要認識到中國目前追求的目標與至少許多市場經濟體的核心目標（僅關注國內生產總值的增長）之間的重要差異。 但還需要認識到，即使就這個狹隘的目標而言，西方市場模式也常常失敗，而且不同的西方國家采取了一係列方法。 西方那些特別關注更廣泛社會目標的人本身也經常對已經采取的一些特定製度安排持批評態度。 舉個例子，美國最近改革了破產法，其方式可能會對那些因無法控製的原因而無法償還債務的人造成嚴重不利，因為
例如，由於一場嚴重的疾病。 至少，這是一個有爭議的變化，反對者認為這可能會加劇社會困境。

其次，我們必須認識到，“一刀切”幾乎永遠不會奏效，將美國知識產權製度等製度安排移植到中國將是一個錯誤。 總是需要一些適應； 但在許多情況下，由於情況和目標的不同，適當的製度安排差異很大，以美國模式為例是錯誤的。

第三，市場經濟有多種形式； 美國模式

在許多方麵，它與斯堪的納維亞模式、歐洲大陸模式或日本模式顯著不同。 這些國家的曆史、社會背景和明確的社會目標各不相同。 斯堪的納維亞模式更加強調社會團結和社會正義，更加關注窮人。盡管增長強勁，但斯堪的納維亞國家在更廣泛的社會福祉指標（例如聯合國開發計劃署的人類發展指標）方麵取得了比美國高得多的績效水平。

他們的創新能力也很強，新技術的滲透率再次躋身世界前列。

第四，許多關於製度設計問題的討論（例如關於製度設計問題的討論）產權）不是基於對特定西方國家這些製度的實際特征和運作的理解，而是基於學術理想化——一些極端團體可能提倡的製度版本，但在實踐中永遠不會被采用 。 例如，雖然一些自由市場經濟學家主張基本私人的退休保險計劃，但美國一再拒絕將其公共社會保障體係部分私有化的想法，最近一次是在布什總統一月份提出將社會保障部分私有化的提議之後。 2005. 政府提供的行政成本要低得多，提供了私人市場通常無法提供的風險保險（例如通貨膨脹風險），並且可以實現其他方式難以實現的再分配目標（減少貧困和減少代際不平等）（見 ，例如 Orszag 和 Stiglitz 2001, 17–56）。

第五，製度安排的細節往往至關重要（或者正如英國 有句格言說，"細節決定成敗”）。 我們在之前關於知識產權的討論中看到了這一點。 美國知識產權製度的許多問題都在於細節，例如知識產權如何執行、專利的廣度以及如何授予專利。 簡單地說“一個人應該擁有強大的知識產權”的討論不會走得太遠。

第六，特別是因為細節如此重要，善意的政策往往會產生意想不到的後果。 在解決一個問題的過程中，會產生新的、意想不到的問題。

下麵，我就當前存在的幾個問題進行簡要的評論

根據剛才討論的總體原則，正在將其作為實施中國第十一個五年計劃的一部分進行討論。 有助於實施中國經濟發展新模式的製度和政策設計將是這一努力成功的核心，在有限的時間內，我隻能再舉幾個例子。

5、產權

中國一直在討論製定產權法律框架。 有人認為，需要的是“強有力的產權”，而強有力的產權是市場經濟成功的基礎。 事實上，有些人甚至認為政府所需要做的就是加強產權保護。

但即使這樣的表述也沒有很好地體現先進工業國家的產權製度。 產權總是受到限製； 例如，知識產權所有者仍然不能以“濫用”的方式使用知識產權，例如 正如美國、歐盟和其他地方的法院一再提醒微軟的那樣，以反競爭的方式。36 在美國，一棵有瀕危鳥類築巢的樹的所有者不能砍倒這棵樹。 在英國各地，步行者都享有通行權，可以享受鄉村風光。

財產權總是伴隨著責任。 例如，擁有一塊土地的人有責任確保該土地不被用作有毒廢物堆放場，如果被用作有毒廢物堆放場並且因此導致下麵的地下水受到汙染，則該財產的所有者 清理混亂的責任，盡管這不是他造成的。

權利和責任的平衡以及限製的性質

社會賦予這些權利和責任是產權製度安排設計的核心。 這是一個複雜的問題，簡單化的討論隻是說我們必須確保安全的財產權，這無助於增進我們對需要做什麽或如何做的理解。

5.1 平衡

許多人對財產權的強調——忽視了責任的重要性——與議程設置上的另一種不平衡並行。 有時對其他權利的關注太少，例如 工人權利或消費者權利。 事實上，這些權利在某些方麵更為基本，因為財產權隻是工具性的，也就是說，其重要性是因為它們的後果，例如，對經濟效率的影響，從而間接對社會福祉的影響； 而這些其他權利直接影響公民的福祉。

對工人權利或消費者權利的討論凸顯了權利的聯係和責任，以及定義個人（或公司）之間以及與政府之間關係的權利和責任的性質。 因此，企業對消費者負有責任，例如 關於他們生產的產品的安全和質量。 工人權利有助於確定公司對其工人的責任。

這就是為什麽任何強調"和諧"的議程都必須平衡地討論財產權和工人或消費者的權利，平衡地討論責任和權利。

5.2 意外後果

加強產權的動機之一是地方政府出於開發目的從農民手中奪走土地，而沒有“公平”的補償。這顯然是一個需要解決的問題。 但設計不當的產權法可能會允許個人以土地為抵押借款，然後，如果他無法償還，就會失去土地所有權。 其結果可能是產生大量無地工人。 這不僅會產生巨大的社會後果，甚至可能對經濟效率產生不利影響。

六、稅收政策

在發展的早期階段，中國感到需要吸引外資； 它擔心國內缺乏企業家、資金和技術。 但這一切都已經改變，給予外國人比國內企業家普遍優惠的稅收待遇已經沒有什麽意義了。 事實上，也有一些相反的觀點：國內創業擴張的溢出效應可能更大，因此應該給予國內企業一些優惠。 此外，許多國外企業麵臨的稅收製度是對外國企業繳納的稅款給予稅收抵免，因此提高外國企業的稅率可能對激勵作用不大，而隻是構成從外國政府到中國政府的再分配。

但均衡稅率可能還不夠。 重要的是細節——規定，例如，關於折舊和其他費用。 許多西方公司善於避稅，即使法定稅率為25%、30%或更高，也不納稅。在市場經濟條件下，稅收政策在資源配置中發揮著重要作用。

前麵討論的新模式的三個目標包括：(a) 保護環境並減少資源利用率； (b) 從出口導向型增長轉向基於國內消費和投資的增長； (c) 糾正日益嚴重的不平等現象。 基於消費的增值稅不考慮環境，是累退的（按照通常的定義，因為低收入個人消費了其收入的較大部分）； 並抑製消費。 因此，雖然稅收對於其他關心鼓勵儲蓄的經濟體來說可能有意義，但對中國來說意義不大。 38 正如我之前指出的，真正有意義的是對碳排放征稅，以及設計碳排放稅。 鼓勵回收的稅收結構。 給定由於擔心過度的房地產投資，並且考慮到設計有效解決該問題的行政措施的困難，對房地產（以及其他投機活動）征收高額資本利得稅也是有道理的。

還有其他稅收改革可以促進中國的結構調整

根據新經濟模式。 在擁擠的城市地區，私家車的成本很高，因此應承擔高額稅收。 當前的稅收結構可能對服務業不利，從流轉稅轉向增值稅既可以提高效率，又可以鼓勵該行業的發展。

最後，中國將需要額外的公共收入來為其社會、環境、和發展議程。 中國顯然可以收集更高的比例稅收占 GDP 的比重，而不對其增長產生不利影響。 斯堪的納維亞國家已經表明，即使非常高的稅率也與快速增長和高稅率相一致。

創新水平。 這些高稅率有助於解釋為什麽在更廣泛的衡量標準上在社會福祉方麵，這些國家的表現優於其他國家。 事實上，增加稅收汙染可以為政府帶來收入，改善環境，並增強
長期增長。

同樣，我們早些時候指出，中國不再需要繼續發展其經濟儲備。 但提高匯率會產生一些不利影響，包括降低農民收入。 抵消美國和歐洲的巨大影響農業補貼將轉移其他社會和發展所需的資源目標。 出口稅（或至少取消增值稅出口退稅）將：相比之下，兩者都減少了貿易逆差並產生了額外的收入。

7. 金融市場

金融市場由於其重要性而在任何市場經濟中都發揮著關鍵作用在資源配置方麵。 金融市場不僅僅是儲戶之間的中介和投資者。 他們收集和處理信息，確定誰值得信用，哪些投資最有可能產生高（風險調整後）回報並強化信用合同。 但我研究的主旨是表明市場失靈是普遍存在的當信息不完善且政府在其中發揮重要作用時金融市場。 如今很少有人質疑政府監管銀行的必要性和證券市場； 唯一的爭論是監管的形式和範圍。

政府監管既可取又可取的原因有很多必要的。 了解這些動機有助於製定政策。 第一個，已經值得注意的是，在信息不完善的市場中，市場失靈是普遍存在的——並且信息不完善是金融市場的核心。 第二是存在感巨大的外部性，在東亞危機中尤為明顯。 不良借貸
人們常常將危機歸咎於做法——但這場危機觸及了受影響地區的每個人國家，而不僅僅是貸款人和借款人。

政府監管需要針對四個目標：(a) 確保安全、金融體係的健全和穩定，認識到許多經濟因素資本主義自誕生以來的顯著波動與弱點有關或金融體係的其他故障； (b) 保護消費者（借款人、投資者）反對濫用行為——在存在許多濫用行為的情況下尤其重要不知情和缺乏經驗的投資者； (c) 確保競爭，認識到即使當金融機構眾多時，市場可能會出現這樣的情況：例如，向中小企業提供貸款方麵的競爭有限特定地點； (d) 確保獲得信貸，特別是服務不足的部門的信貸組。為了實現這些目標，政府需要采取一係列措施工具，包括基於市場的幹預措施和行政措施。 例如，為確保銀行不從事風險過高的貸款，基於風險的資本充足率要求和存款保險費可以作為基於市場的一部分措施。

7.1 獲得信貸

在這裏，我隻想談四個方麵。39 首先是市場本身，經常無法提供信貸（或至少以合理的價格提供充足的信貸）條款）向某些類別的潛在借款人提供。 這就是為什麽即使在像美國這樣高度發達的金融市場，政府已經進行了幹預在金融市場上促進抵押貸款、學生貸款、中小企業信貸、服務欠缺社區信貸和農村信貸。 論據為在中國目前的發展階段，這種幹預措施更加引人注目。

如果中國要取得成功，增加這些領域的信貸流動尤為重要其目標是縮小巨大的收入差距； 這是一個例子一種既能促進增長又能促進平等的政府行動 — — 並且可能甚至有助於經濟結構調整遠離出口。

在美國（和許多其他國家），幹預措施已經采取了多種不同的形式，中國可能會受益於廣泛使用工具組合：成立專業銀行和貸款機構； 這對服務不足的社區和部門施加貸款要求（參見美國社區再投資法要求）； 或提供部分擔保或補貼有限。 印度提出了要求，其效果是增加農村和更偏遠地區的分支機構以及信貸的可用性。 如果設計得當，這些要求可以符合世貿組織的義務。 否則有是一種誘惑，特別是對外資銀行來說，從事“撇脂”行為，提供例如，對大企業的信貸充足，但對國內中小型企業的信貸卻很少。 事實上，最近的一些研究表明，在許多國家，外資銀行實際上導致了對這些企業信貸的整體減少。

也許中國應該做的最重要的事情是鼓勵本地中小型銀行。 正如我在其他地方所說的，提供的關鍵是信用就是信息； 當地銀行更有可能對當地情況有相對充分的了解（中小型）公司（Stiglitz 和 Greenwald 2002）。 當然，中國需要同時增強對中小企業的監管能力
銀行。

7.2 資本和金融市場自由化的風險和回報

第二是認識到資本或金融市場自由化本身可能不會導致更快的增長，但可能導致更大的經濟不穩定。 即使是國際貨幣基金組織，其 2003 年的研究（Prasad 等，2003）承認資本市場自由化已經給許多發展中國家帶來了沒有回報的風險。 結果令人驚訝——與經濟“理論”相反——但它僅僅與基於經濟理論的相反完美的信息和無限生命的個體。 更真實的模型，基於信息不完全，40 與實證結果完全一致。 其含義很明顯：中國在開放金融和資本市場時必須格外小心。遺憾的是，我今天沒有時間更詳細地描述適當的設置政策； 但複雜性和風險強烈支持漸進主義政策。 這尤其如此，因為對於投資者、監管機構和金融公司來說，都有一個學習過程。

第三是認識到不同目標之間可能存在重要的權衡。

例如，可以通過要求確保銀行係統的安全性和健全性銀行僅持有短期政府票據； 但如果這樣做的話，銀行就不會能夠履行其主要職能之一：提供信貸機會。

7.4 適應不斷發展的中國市場經濟

第四是認識到中國經濟快速發展的特點金融市場需要適應性強的監管政策。 例如，作為其一部分加入世貿組織協議後，將會有外國金融公司進入。 此前，金融體係履行了許多社會職能。 對於某些人來說可能是不可能的其中這些將通過金融係統41以及更高的透明度來實現，例如 隱性補貼可能是一種附帶好處。 在其他情況下，可以采用以下方法這些目標一旦實現就必須改變； 例如，為了中小型企業有充分獲得信貸的機會，CRA 等法規
可能必須施加之前討論的要求。

中國不斷發展的市場經濟的一個重要方麵是新經濟模式，更加注重國內消費。 正如我們之前指出的，出口拉動型增長在中國早期經濟增長中發揮如此關鍵作用的原因之一發展的意義在於它使國家的生產能力能夠更快地擴大比擴大總需求的能力——確保投資的能力支出將得到充分利用，並且有能力確保可能的消費者獲得信貸將能夠或願意償還。 今天，加強金融機構提供消費貸款（包括抵押貸款）的能力增強。 但中國應該吸取其他國家的教訓：金融機構有時會掠奪對不知情的消費者收取過高的利率，這可能在消費者缺乏債務經驗的情況下尤其如此。

此外，他們的貸款常常超出個人的償還能力，這可能會導致壓力就消費者而言，當足夠多的人無法償還時，壓力對整個金融體係的影響。 中國需要強有力的消費者保護立法嚴格執行，並以有利於債務人的破產法為後盾貸款人更有動力進行盡職調查，以確保借款人擁有
還款能力。

八、社會保險

現在人們普遍認識到，中國儲蓄率如此之高的原因之一是比率是缺乏足夠的社會保險；42 公共部門存在不足提供教育、健康和退休計劃。 公眾對這些措施的支持力度更大計劃將有助於實現新經濟模式的兩個關鍵部分：幫助中國擺脫出口導向型增長並努力減少公民之間的福祉差異，但設計一個良好的社會保險製度並不容易，尤其是在高度發達的情況下。

具有競爭力的全球經濟。 正如我之前指出的，斯堪的納維亞國家已經表明提供強有力的社會保險計劃（包括強有力的公共教育係統）實際上可以為一個國家提供競爭優勢。 參加比賽全球市場需要一支健康、受過良好教育、能夠適應環境的勞動力隊伍變化的速度之快。承擔風險對於成功至關重要，強大的社會安全網加上高水平的就業機會可以增強人們的能力和意願個人承擔風險。

關於國際貿易的優點——提供的收益——有很多討論通過更大的市場。 但建立強大的國家所帶來的經濟收益經濟規模更大。 強大的國民經濟需要勞動力流動； 和勞動力流動需要國家社會保險製度。

此外，過去，中國和其他地方的公司從事兩種不同的業務活動——生產和提供社會服務。 參與全球競爭市場需要分離這些職能，這意味著政府必須發揮更大的作用。 正如我們之前指出的，經濟和社會發展狀況良好不能由政府提供至少基本水平的社會保險的原因市場單獨。 幸運的是，中國的快速增長意味著應該有資源由此開始創建一個強大的全國性社會保險計劃。

9. 宜居城市

此前我曾多次討論過創建宜居城市的重要性。城市。 中國正在快速城市化。 44 越來越多的中國人口將生活在城市地區，這些城市地區的設計方式將產生巨大的影響，生活質量、整體經濟效率和環境中國經濟增長的影響。 市場力量本身不會導致創造宜居城市，並且對某些政府官員有內在的激勵措施以及為私營部門企業家創造城市擴張和設計與宜居城市的基本原則背道而馳的城市空間。 這是各國政府現在就采取行動尤其重要，並具有明確的長期目標土地使用模式的後果：今天做出的決定，例如 相對於該道路網絡的設計將在未來幾十年產生影響。

中國已經從計劃模式轉向市場體係。 但在這個舉動中脫離規劃並走向市場，可能無法充分升值市場的限製。 在土地利用方麵尤其如此。 在大多數西方國家，城市規劃至關重要——自然產生的外部性也太大而不容忽視通過簡單的價格體係來處理複雜的問題。 少數幾個嚐試過的城市沒有規劃可以提醒人們為什麽城市規劃如此重要。 為了確定，分區也可能成為規劃設計和撥款過程中腐敗的根源。變化； 除了實施強有力的善政政策之外，別無選擇。

10.信息係統

運轉良好的經濟體需要良好的信息； 但有係統的市場失敗。 個人通常有動機不透露相關信息，或更糟糕的是，提供扭曲的信息。 我的大部分理論工作都致力於了解不完美信息對企業運作造成的問題現代經濟。我也強調了良好會計製度的重要性某些利益衝突以及不當激勵所帶來的危險哪些股票期權係統可能會產生。

我最近的一些研究與信息問題有關

這些問題出現在組織內部和公共部門（例如，參見 Stiglitz 2003b）。政府也需要獲得良好的信息才能做出正確的決策。 那裏是政府官員不向公民或他們應該報告的人披露正在發生的事情的動機。 當然，需要有強有力的法律來避免利益衝突，就像世界上也需要這樣的法律一樣。

私營部門。

正如成功的私營部門管理者已經了解到，有一個需要有多種信息渠道，公共部門也是如此。 一個充滿活力、負責任的媒體可以是這樣的渠道之一。 為了使其有效，它必須具有訪問權限相關信息，這就是為什麽要製定知情權法（“信息自由法”）竟然如此重要。 當然，媒體也必須承擔責任。 設計適當誹謗法很重要。 不幸的是，此類法律經常被濫用，在某些情況下各國已經損害了積極而充滿活力的新聞界所帶來的好處。

11. 結束語

我在這裏指出，中國的情況已經發生了變化，這就需要一個不同的模式——而且由於中國的情況與其他國家不同，中國的模式不可避免地需要與其他國家不同。

大約三十年前，中國走上了新的道路。 它談到了一個務實的“摸著石頭過河”的政策。 其背後的實用主義中國取得巨大成功的部分原因是這種方法。

現在中國已經過了大半條河，那河的另一邊是什麽？側麵更清晰。 更清楚的是，市場經濟有許多不同的形式——許多不同的地方可以在河的另一邊著陸。 中國現在可以看到
可以對其采取的方向產生很大的影響。 什麽樣的市場它選擇的經濟將影響它將創造什麽樣的社會。

即使中國摸著石頭過河，創造了一個市場符合中國獨特國情和目標的新經濟模型。 中國的“十一五”規劃體現了這種新的經濟模式。 在本文中，我試圖闡述這一新經濟的一些經濟基礎模型並提出它對政策設計可能產生的一些影響機構。

致謝

本文是中國發展高層論壇講話的修改稿，北京，2007 年 3 月。感謝莫吉提出的有益的意見和建議，以及多年來與 Larry Lau、Justin Yifu Lin、David Dollar 的對話，謝伏瞻、周啟仁以及中國曆次會議的其他與會者發展論壇。 林毅夫對此草案提供了詳細的評論，對此我我特別感激。

筆記

1. 一個例子是中國在從現行價格體係轉型過程中采用雙軌價格體係正在規劃價格更加市場化。
2、過去二十年，2.2億中國人擺脫了絕對貧困，占發展中國家減貧人口的75%。
3. 衡量不平等的標準之一是基尼係數。 中國基尼係數上升從0.16（改革前）到0.47（2005年後）。 相比之下，美國的基尼係數為 0.466，日本為 0.249，斯堪的納維亞國家為 0.3 左右。 看http://www.forbes.com/free_forbes/2005/1010/064.html。
4. 參見他的演講“人類發展與健康”（Sen 2006）。 森還指出，喀拉拉邦預期壽命高於中國除城市群外的所有省份比如北京、上海。 嬰兒死亡率與 1979 年相當； 現在喀拉拉邦是是中國的三分之一。
5. 事實上，考慮到中國的低水平，中國的表現也許應該受到讚揚。健康支出——估計占 GDP 的 2% 至 3%（參見 http://earthtrends.wri.org/text/environmental-governance/variable-642.html）。 （相比之下，美國約 15% 的 GDP 用於醫療保健。

6. 這在美國尤為明顯，近年來，GDP 一直在增長，而中位數家庭收入一直在下降——即使隻看收入，今天大多數美國人情況比五年前更糟； 但如果考慮到健康不安全感的增加——超過 4660 萬人沒有醫療保險，這個數字每年都在持續上升今年——生活水平的惡化更加明顯。 參見美國人口普查局（2006）。

7. 我的討論特別集中於所謂的“市場失靈”，例如環境外部性，市場本身可能無法帶來有效的結果。

8. 溫家寶總理呼籲關注能源和汙染物的嚴重短缺：2006年單位GDP能耗下降1.2%，成績斐然尤其是與前三年4.9%、5.5%、0.2%的增幅相比——目標是單位GDP能耗下降4%。 （溫，2007）。 盡管如此，中國的應當注意到在提高能源效率和減少排放方麵取得的成就：1990年和2002年，中國單位GDP二氧化碳排放量增加了50%以上，而世界平均水平下降不到20%。 參見王孟奎等人。 （2007）。

9. 盡管中國改變了經濟模式，但它繼續關注更廣泛的目標不僅僅是國內生產總值的增長，即生活水平的公平和可持續的提高。 措施綠色 GDP 和聯合國開發計劃署的人類發展指數 (HDI) 可能比人均國內生產總值 (GDP) 提供更好的成功衡量標準資本。

10. 例如，美國隻需將紡織品采購從中國轉移到孟加拉國或柬埔寨; 這些國家更有可能花費由此產生的增加收入在他們自己的國家； 如果他們確實決定持有更多外匯儲備，

China Economic Journal
Vol. 1, No. 1, February 2008, 33–52
China: Towards a new model of development
Joseph E. Stiglitz*

https://core.ac.uk/download/pdf/161443511.pdf

The Columbia Business School, Columbia University, New York, USA
(Final version received 18 March 2007)
This essay argues that changes in China’s circumstances require a different model for the Chinese economic development. Because China’s circumstances are different from that of other countries, the model for China inevitably needs to be different from that of elsewhere. In line with the central ideas, the essay discusses extensive issues regarding China’s economic development such as export growth model, innovation, property rights, tax policy, social insurance, etc.

1. Introduction
China’s success over the past 30 years, since it began its transition to a market economy has been based, in no small measure, on the adaptability of its strategies and policies: as each set of problems was solved, new problems presented themselves, for which new policies and strategies had to be devised. It has also been based on social innovation.

Because the problems confronting China were different from those that confronted other countries, new solutions had to be found.1 And it recognized that it could not simply transfer economic institutions (even when they had worked well in other countries); at the very least, they had to be adapted. Not only did the circumstances and history of China differ, but so, too, to a large extent did its objectives. These were among the reasons that China talked of a market economy with Chinese characteristics. And even successful Chinese institutions had to be modified and adapted as times changed. The Township and Village enterprises, itself a social innovation so central to the successes of the 1980s and early 1990s, could not meet all the challenges that China faced as it became an increasingly important player in the global economy.

Last year, China, in announcing its 11th Five-Year Plan, focused on some of the
problems that its past successes had presented. Not everyone had benefited equally from the rapid growth of early decades; and though there was enormous success in reducing poverty, inequality had grown enormously.

The greater reliance on markets had meant that in some dimensions, such as health and education, living standards in some rural areas probably had deteriorated. More broadly, Amartya Sen4 has argued that while in 1979, the life expectancy of China and India’s state of Kerala were roughly the same,little for global imbalances, and might even make matters worse, since it would make the problem of financing the US trade deficit more difficult;10 but China faced the dilemma: if it appreciated the currency, and subsidized its farmers – to, in effect, countervailing the subsidies provided by the US and the EU, it would take away scarce money needed for other developmental objectives, including investments in education and health.

2.1 Alternative measures for moving away from exports

There is a need for other measures to correct the trade imbalances that would not
simultaneously increase rural urban differentials. One such measure is an export tax or reduced export rebates, which have the further advantage of providing additional revenues that could be directed at other social objectives.

Many of China's exports are energy intensive, with societal costs that go well beyond the costs borne by firms. Raising the price of energy and imposing a carbon tax and other environmental taxes (to be discussed further below) would help adjust the structure of the economy – including helping China move away from exports – and again provide additional revenues that could be directed at other social objectives.

2.2 Why export-oriented growth

It is natural to ask: Why did export-led growth work for China and for so many of the other East Asian countries? Will the move away from export led growth adversely affect its growth? Are there other ways in which the needs it satisfied can be met?

Export-led growth was important for three reasons. Firstly, it provided the basis
of innovation. What separates developing and developed countries is not just a gap in resources, but a gap in knowledge. As Greenwald and Stiglitz (2006) point out, for a variety of reasons the transmission of knowledge is enhanced the larger the size of the industrial sector. The skills learned in that sector then gradually are transmitted to the rest of the economy. Secondly, there is intense competition in exports, and competition spurs efficiency and innovation. Success requires meeting international standards, again a benefit that extends eventually throughout the economy. Thirdly, in the early stages of development, the capacity to produce may outstrip the capacity to consume, or more accurately, the expansion of the demand for the particular goods that are being produced.

While there may be latent demands by many households and firms, these latent demands are translated into effective demands only if these households and firms can get access to credit. But in the earlier stages of development, financial institutions (and the underlying legal infrastructure) that can discriminate between those who are creditworthy and those that are not and that can enforce credit contracts often have not developed.12 It is easier to lend abroad to finance foreigners’ consumption than to lend at home.

Indeed, China can be viewed in recent years as having been engaged in vendor finance: it has lent much of the money that has enabled those elsewhere to buy its goods. But there is something peculiar about China helping the richest country in the world to live beyond its means,14 when there are so many pressing needs at home.

2.3 Why China today can move away from export-led growth

Today, these functions that export-led growth has served can be accomplished in other ways. China is establishing a broad innovation system (see below); it has 'learned how to learn'; it does not need to rely on exports for learning. China has created vibrant internal competition, e.g. among TVEs and other establishments. To be sure, there is a need for strong competition laws to ensure that domestic competition remains strong, and China should be wary of those arguing for the establishment of large 'national champions' , at least when the establishment of those national champions threatens domestic competition. Finally, China has made great strides in creating a strong domestic financial system. It would be easy, at this stage, to expand domestic credit, especially for housing and collateralized debt.

2.4 Stimulating consumption

In spite of the talk about moving away from export led growth, China’s trade surplus has actually increased from 102 billion US dollars in 2005 to 177.5 billion US dollars in 2006. Household consumption has increased, but it has not increased as fast as GDP. Expanding consumption would not only help China move away from its dependence on exports, but would contribute to rising living standards – and the objective of development is raising living standards. The question is: Why has China had 'excessive'savings?

There are four hypotheses; each plays a role, though some may be more important than others.

The first is growing inequality. With consumption propensities among the rich
typically lower than among the poor,19 an increase in inequality will result in a lower ratio of consumption to GDP. Policies that reduce the degree of inequality would, accordingly, be expected to increase consumption.

The second is capital market imperfections, especially those facing small- and
medium-sized businesses. Some data suggests that the number of small businesses in urban areas have declined;20 historically, small businesses are associated with job growth. They are especially important in providing new opportunities for those that in the past had none. Many contend that small businesses are at the heart of a dynamic economy – while large businesses bring products to market, they depend on a host of small businesses for the real innovations.

A decline, or even stagnation, in the number of small businesses should, accordingly, be a cause of concern. One of the reasons that has been posited for the decline in small businesses is lack of access to capital. Large banks prefer lending to large businesses. In the United States, there is a special government program through the Small Business Administration to encourage lending to small businesses, through absorption of some of the risk. In the absence of access to funds, those who would aspire to be small businessmen – or those already in small businesses – have to save at a very high rate to have the funds they need to expand. Hence, improving access to credit would help lower the overall savings rate. But the major barrier to increasing consumption is not lack of credit, but the lack of an effective social safety net, a strong public health system, an effective social security system, and good publicly provided education. 'Precautionary' savings depresses consumption.

These reforms would thus yield a double benefit, freeing China from its dependence on exports (and the vagaries of international markets) as it improves standards of living.

The final reason for a high ratio of savings to GDP is the high current account
surplus, symbolized by the large additions to reserves. In 2006, these amounted to 7% of GDP. At the same time, the government has maintained a strong fiscal position. But as we noted before, China has accumulated enough reserves to meet any plausible variability in the market place. Given the high social needs in health and education – and its high private savings rate – China could well afford to have a modest fiscal deficit (see Feldstein 2007).

Less reliance on exports could, of course, be achieved by expanded investment; but with China’s investment rate as high as it is, the issue today is not so much the level of investment but its allocation. The worry is that there is a perverse set of incentives at play – with local communities rushing in to encourage investment, both to generate jobs and revenues for themselves. Especially in real estate, there is a concern that short-sighted investors are focusing on short-term capital gains rather than long-term returns.

3. Innovation
At the centre of the new economic model is innovation – increasing the efficiency with which scarce resources are used. Innovation is endogenous, the result of allocation of resources to R& D and conscious policies attempting to learn how to produce 'at the frontier or adopt the best practices as it is sometimes put'.  But resources devoted to research and learning are, like all resources, scarce. One can direct such research at different objectives. Unfortunately, Western firms have directed their research too much at reducing the input of labour, and too little at reducing environmental impacts.

The problem is that the social returns to innovation differ from the private returns, both because of distortions in markets and because the private returns to obtaining a patent differ markedly from the social returns 

3.1 Excessive incentives for labour-saving innovations

For instance, high wages in the West mean that there is a high return to reducing labour input. Even in countries where the unemployment rate is high, there are large investments in labour-saving technologies, exacerbating the unemployment problem. The focus on labour-saving innovations is the reason that so many countries face growing problems of unemployment. If productivity increases at 5% a year, output has to increase at 5% a year just for employment to remain constant.

Indeed, for the owners of the firms in the industrial sector, there is a further benefit from the increasing unemployment: the higher unemployment rate serves to depress wages, lowering the cost of production further. For a ‘harmonious society’, however, jobs have to be created to match new entrants into the labour force. In the case of China, the pace of urban job creation needs to be even greater, as labour migrates from the rural to the urban sector. And higher wages are not a bad thing: the whole purpose of development is to increase the wellbeing of workers.

3.2 Insufficient incentives for resource saving innovation

By the same token, because American firms do not pay anything for carbon emissions –regardless of the cost imposed on the global economy – they have no incentive to look for innovations that reduce carbon emissions. Making firms pay the full marginal social costs of their activities – the cost, say, of carbon emissions – would enhance incentives for pollution reducing innovation.

A carbon tax would have, in addition, one further important advantage. It could break the global impasse on what to do about global warming. The scientific evidence about the risks of this impending calamity has been mounting. The UK Stern Report (2006) made a convincing case that the economic benefits – taking into account all the risks – of doing something to mitigate the risks outweighed the costs.24 The Kyoto protocol was based on emission targets determined on the basis of reductions from the 1990 levels of emissions. Unfortunately, no one has come up with a set of principles that would guide the determination of emission target levels in a fair and equitable way, which would be acceptable to both the developing countries and the US. Because the distributional consequences of a common policy – each country would agree to impose a carbon tax, at rates reflecting the agreed upon global social cost of carbon emissions – are much more limited, there may be some hope of a global agreement.25 Besides, it makes so much more sense to tax bads – like pollution – rather than goods, like work and savings.

3.3 Fundamental problems in designing an innovation system in a market economy

The problem with the innovation system in market economies is, however, deeper. It is often suggested that intellectual property is at the centre of the market economy's innovation system. But the rewards provided by the patent system do not accord well with social returns. The marginal social return to innovation is making the innovation available sooner than it otherwise would have been. But the patent system gives the (temporary) property right to the first person to discover (or more accurately, to patent) the innovation.

For instance, consider the case of the human genome. There was an international
effort to decode the human genome. This effort was on track when some firms decided to try to 'beat' the publicly funded project. If they beat them even by one hour, they got all the benefits of the monopoly – even though their marginal social contribution was nil.

But while in these cases, the benefits are nil, the cost of the patent system to society is huge. Knowledge is a public good; knowledge is ‘non-rivalrous’. When one person tells a piece of knowledge to another, it does not detract from what the first person knows.

Restricting the use of knowledge is inefficient. But the patent system not only restricts the use of knowledge, it also gives the exclusive right to the use of that knowledge to one party – it creates an artificial monopoly, and monopolies distort resource allocations. In the case of medicines, what is at stake is not only money, but lives themselves. Monopolists may charge a price so high that the poor cannot afford the medicine; thousands, perhaps hundreds of thousands, of individuals may die unnecessarily as a result, especially when there is an inadequate public health system. As a result of the patent on the gene that
shows a strong likelihood of breast cancer, the owner of the gene insists on a large payment for every test performed. The resulting $3,000 fee puts the test out of the range of anyone without health insurance, and even in a rich country like America, more than 50 million Americans do not have health insurance. The result is that thousands of people will die unnecessarily.

The only justification for this enormous cost of static inefficiency associated with the patent system is that there may be dynamic gains. But if the intellectual property regime is not well designed, the costs will outweigh the benefits. An intellectual property regime is defined by a whole set of detailed provisions, which describe what can be patented (or copyrighted), the standards of novelty, the life of the patent, the breadth of the patent, the process by which patents are granted and challenged, and the enforcement mechanism.

Indeed, a poorly designed intellectual property regime can even stifle innovation. The worry today in America is that its intellectual property regime is doing just that. The increasing concerns are leading to an active debate about the reform of the intellectual property regime in the US.26 At the very least, those outside the United States should recognize that the mantra that one hears from certain corporate leaders and government officials – that the stronger the intellectual property regime, the better – does not reflect the mainstream of thinking among economists and academic intellectual property lawyers who are not in the employ of the corporations that derive so much of their profits from the current regime. 

Every country has to have an intellectual property regime that is appropriate to its own circumstances.27 It has to balance the costs and the benefits; and in general, the way that is done will differ markedly between developed and developing countries. That is why at the World Intellectual Property Organization, the developing countries have demanded a development-oriented intellectual property regime. We noted earlier that one of the main challenges facing developing countries is reducing the gap in knowledge that separates them from more developed countries. A poorly designed intellectual property regime may make it more difficult to close that gap. The worry is that under the influence of
TRIPs, many countries are adopting American-style intellectual property regimes, which, as badly suited as they may be for America, are even more ill-suited for developing countries – and just at a time when America itself may be realizing that reform is needed.

A well-designed innovation system consists of a portfolio of instruments, including government-financed research (supporting research at universities, specialized laboratories, and even corporations), prizes, and patents. A prize system provides a reward – a large prize for innovations of high social value, such as a cure for an important disease like malaria, a small prize for a me-too medicine – but then the knowledge is made available to anyone who wants to use it with perhaps a licensing fee.28 Of course, the patent system is a prize – the award of a distortionary monopoly power. But while the patent system is designed to restrict the use of knowledge and raise prices, the prize system uses the power of the market economy and competition to ensure the lowest possible prices and the greatest dissemination of the knowledge, so that the benefits of the knowledge are enjoyed by as many people as possible.

China needs to have an innovation system that puts greater emphasis on prizes and government-funded research, and less emphasis on patents than does, say, the US system, especially because the innovation needs to be directed at a broad range of social objectives that I noted earlier – as I argued, the focus should be on reducing inputs of environmentally sensitive resources, not on saving labour.

3.5 Learning lessons from other countries

But even when it comes to the intellectual property regime, China should learn the appropriate lessons from the deficiencies in America’s intellectual property regime, which have become even clearer during the past year, since I talked about these issues briefly in my talk before the China Development Forum. It does not need to repeat the same mistakes. It needs to think carefully, for instance, about procedural issues (challenging patents before they are issued), recognizing that there is in fact a bias leading to overpatenting. There are strong private incentives to try to get a patent – one can privatize part of the public domain of nowledge; but challenging a patent provides a public good, a conversion of what otherwise would have been in the private domain, making it publicly available. There will, accordingly, be an undersupply of challenges; designing the intellectual property regime procedures can go a little way to redressing this imbalance.

There are other issues concerning the scope of the patent and the standards of 'novelty', what can be patented, enforcement procedures – compensation for 'trespass', i.e. a liability system as opposed to the current American system, the duration of copyrights,31 etc.

The TRIPs agreement puts obligations on all member countries to adopt an intellectual property regime; but even within TRIPs, member countries have considerable discretion, and it is important that China use that discretion to create an intellectual property regime that is appropriate for China. While I have described several features of the design of such an intellectual property regime above, I want to draw attention to one other feature: the use of compulsory licenses. TRIPs provided for ‘flexibilities’ for the issuance of these, allowing the production of generic medicines, which can sell for a fraction of the cost of brand name medicines. Most countries, including China, have not made full use of these flexibilities, which can make such a difference to the health of the citizens of the
country.

4. Creating the institutions for a market economy

This brief discussion of the innovation system illustrates several important themes of the New Model for China’s development. Firstly, success in this New Model will require recognizing the important differences between the objectives that China is now pursuing, and those that are at the centre of at least many of the market economies, focusing exclusively on an increase in GDP. But it will also require recognizing that even in terms of that narrower objective, Western market models often fail, and that there are a range of approaches taken within different Western countries. Those in the West who are concerned with broader social objectives in particular are themselves often critical of some of the particular institutional arrangements that have been adopted. To take an example, the US recently reformed its bankruptcy law in ways that may significantly disadvantage those who cannot repay what they owe for reasons beyond their control, for
instance as a result of a serious illness. At the very least, it is a contentious change that its opponents believe may contribute to an increase in social distress.

Secondly, one has to recognize that ‘one size fits all policies’ almost never work and that transplanting institutional arrangements such as America’s intellectual property regime to China would be a mistake. Some adaptation is always required; but in many cases, given the differences in circumstances and objectives, the differences in the appropriate institutional arrangements are so large that it would be a mistake to begin with, say, the American model as a template.

Thirdly, there are many different forms of a market economy; the American model
is, in many ways, markedly different from the Scandinavian model, the continental European Model, or the Japanese model. These countries differ in their history, their social context, and their articulated social objectives. The Scandinavian model puts more emphasis on social solidarity and social justice and exhibits more concern for the poor.

The Scandinavian countries have succeeded in achieving much higher levels of performance in terms of broader indicators of societal wellbeing (such as the UNDP's Human Development Indicator) than the United States, even though their growth has been robust.

They have also been highly innovative, with the penetration of new technologies again scoring towards the top in the world.

Fourthly, many of the discussions of institutional design issues (such as those on
property rights) are based not on an understanding of the actual features and workings of those institutions in particular Western countries, but on an academic idealization – a version of those institutions that some extreme groups might advocate, but that would never have been adopted in practice. For instance, while some free market economists have advocated a basically private retirement insurance program, the United States has repeatedly rejected the notion of even partially privatizing its public social security system, most recently following the proposals of President Bush to partially privatize social security in January 2005. Government provision entails far lower administrative costs, provides insurance against risks (like the risk of inflation) that private markets typically do not provide, and can achieve redistributive objectives (reducing poverty and reducing intergenerational inequality) that are otherwise difficult to realize (see, e.g. Orszag and Stiglitz 2001, 17–56).

Fifthly, the details of institutional arrangements are often critical (or as the English
aphorism has it, ‘the devil is in the details’). We saw this in our earlier discussion of intellectual property rights. Many of the problems of America's intellectual property regime lie in details, about how intellectual property rights are enforced, the breadth of patents, and how patents are granted. A discussion that simply says,'One should have strong intellectual property rights' doesn't take one far.

Sixthly, especially because the details are so important, there are often  unintended consequences of well-intentioned policies. In solving one problem, new, unanticipated problems are created.

In the following paragraphs, I comment briefly on several issues that are currently
being discussed as part of the implementation of China’s 11th Five-Year Plan, in light of the general principles just discussed. The design of the institutions and policies which will help implement the New Model of China’s Economic Development will be at the heart of the success of this endeavour, and in the limited amount of time, I can only touch upon a few further examples.

5. Property rights

China has been discussing the adoption of a legal framework for property rights. Some argue that what is needed is ‘strong property rights’, and that strong property rights are the basis of the success of the market economy. Indeed, some go so far as to suggest that all the government needs to do is to enforce strong property rights.

But even the formulation of this does not capture well property rights systems in the advanced industrial countries. Property rights are always restricted; for instance, owners of intellectual property rights still cannot use those in ways which are 'abusive', e.g. in an anti-competitive manner, as Courts in the US, EU, and elsewhere have repeatedly reminded Microsoft.36 In the United States, an owner of a tree on which an endangered species of bird has nested cannot cut the tree down. Throughout the UK, there are rights-of-way that allow walkers to enjoy the countryside.

And property rights are always accompanied by responsibilities. A person who owns a tract of land, for instance, has the responsibility to make sure that it is not used as a toxic waste dump, and if it is and if as a result ground water underneath is polluted, the owner of the property has the responsibility of cleaning up the mess, even though he did not create it.

The balance of rights and responsibilities and the nature of the restrictions which
society imposes on those rights and responsibilities are at the heart of the design of institutional arrangements for property rights. It is a complex matter, and simplistic discussions that simply say we must ensure secure property rights do little to advance either our understanding of what needs to be done or how to do it.

5.1 Balance

The emphasis of many on property rights – ignoring the importance of responsibilities – is paralleled by another imbalance, in the setting of the agenda. Too little attention is sometimes paid to other rights, e.g. workers’ rights or consumer rights. Indeed, these rights are, in some ways, more fundamental because property rights are only instrumental, that is, of importance because of their consequences, for instance, for economic efficiency and therefore, indirectly, to societal wellbeing; while these other rights affect directly the wellbeing of citizens.

Discussions of workers' rights or consumer rights highlight the linkage of rights
and responsibilities, and the nature of rights and responsibilities in defining relationships among individuals (or corporations) with each other and with the government. Thus, firms have responsibilities to consumers, e.g. with respect to the safety and the quality of what they produce. Workers' rights help define firms' responsibilities to their workers.

That is why any agenda emphasizing 'harmony' must have a balanced discussion of property rights and of the rights of workers or consumers, and a balanced discussion of responsibilities as well as rights.

5.2 Unintended consequences

One of the motivations for strengthening property rights arises from local government taking land away from farmers for development purposes, without 'fair' compensation. 

This is clearly a problem that needs to be redressed. But poorly designed property rights laws could allow individuals to borrow against the land, and then, if he cannot repay, lose title to the land. The result could be the creation of large numbers of landless workers. Not only could this have large social consequences, but it could even have adverse consequences on economic efficiency.

6. Tax policy

In earlier stages of development, China felt it needed to attract foreign investment; it worried that there was a shortage of entrepreneurs, capital, and technology at home. But this has all changed, and it makes little sense to give foreigners in general preferential tax treatment over domestic entrepreneurs. Indeed, there are arguments going in the contrary direction: spill-overs from the expansion of domestic entrepreneurship may be greater, so that some preferences should be given to domestic firms. Moreover, many foreign
firms face tax systems where tax credits are given for foreign taxes paid, so that raising tax rates on foreign firms may have little effect on incentives, and simply constitute a redistribution from foreign governments to China's government.
But equalizing tax rates may not suffice. What matters are the details – provisions,
for instance, concerning depreciation and other expenses. Many Western companies are adept at tax avoidance, paying no taxes even though the legislated rate is, say, 25%, 30%,or higher.

In a market economy, tax policies play an important role in resource allocation.
Three of the objectives of the New Model discussed earlier include: (a) protecting
the environment and reducing resource utilization; (b) moving away from export-led growth to growth based on domestic consumption and investment; and (c) redressing the growing inequalities. The consumption-based VAT pays no attention to the environment, is regressive (in the usual definition, since lower income individuals consume a larger fraction of their income); and discourages consumption. Thus, while the tax might make sense for other economies, which are concerned with encouraging savings, it makes little sense for China.38 What does make sense, as I noted earlier, are the imposition of taxes on carbon emissions, and the design of tax structures which encourage recycling. Given
worries about excessive real estate investment, and given the difficulties of designing administrative measures that deal with the problem effectively, it also makes sense to have high capital gains taxes on real estate (as well as other speculative activities).

There are other tax reforms that could facilitate China’s structural adjustment
according to the New Economic Model. There are large costs associated with private cars in congested urban areas, and they should accordingly bear high taxes. The current tax structure may disadvantage services, and shifting from a turnover tax to a VAT would both increase efficiency and encourage the development of this sector.

Finally, China will need additional public revenues to finance its social, environmental,
and developmental agenda. China could clearly collect a substantially higher fraction
of GDP in taxes, without adversely affecting its growth. The Scandinavian countries
have shown that even very high tax rates are consistent with rapid growth and high
levels of innovation. These high tax rates help explain why, on broader measures of
social wellbeing, these countries outperform other countries. Indeed, increasing taxes on
pollution could generate government revenues, improve the environment, and enhance
long-term growth.
Similarly, earlier we noted that China no longer needs to continue to build up its
reserves. But increasing its exchange rate would have several adverse effects, including
lowering the incomes of farmers. Offsetting the effect of America and Europe’s huge
agricultural subsidies would divert resources needed for other social and developmental
objectives. An export tax (or, at a minimum, eliminating export rebates of VAT) would,
by contrast, both reduced the trade gap and generate additional revenues.
7. Financial markets
Financial markets play a key role in any market economy, because of their importance
in allocating resources. Financial markets do more than intermediate between savers
and investors. They gather and process information, determine who is credit worthy,
which investments are most likely to yield high (risk adjusted) returns, and enforce credit
contracts. But the thrust of my research was to show that market failures are endemic
when information is imperfect, and that there is an important role for government in
financial markets. Few today question the necessity of government regulation of banks
and securities markets; the only debate is about the form and extent of the regulation.
There are a number of reasons that government regulation is both desirable and
necessary. An understanding of these motivations helps shape policies. The first, already
noted, is that market failures are endemic in markets where information is imperfect – and
information imperfections are at the heart of financial markets. The second is the presence
of large externalities, so evident in the East Asia crisis. Bad lending and borrowing
practices are often blamed for the crisis – but the crisis touched everyone in the affected
countries, not just the lenders and borrowers.
Government regulation needs to be directed at four objectives: (a) ensuring the safety,
soundness, and stability of the financial system, recognizing that many of the economic
fluctuations that have marked capitalism since its beginnings are related to weaknesses
or other failures of the financial system; (b) protecting consumers (borrowers, investors)
against abusive practices – especially important in a context where there are many
uninformed and inexperienced investors; (c) ensuring competition, recognizing that even
when there are many financial institutions, the market may be such that there may be
limited competition in, say, the supply of loans to small or medium sized firms in a
particular locale; and (d) ensuring access to credit, especially of underserved sectors and
groups.
In accomplishing these objectives, the government will need to employ a portfolio of
instruments, both market-based interventions and administrative measures. For instance, to ensure that banks do not engage in excessively risky lending, risk-based capital adequacy
requirements and deposit insurance premiums may be used as part of market based
measures.
7.1 Access to credit
Here, I want to touch on only four aspects.39 The first is that markets, by themselves,
often fail to provide credit (or at least provide an adequate supply of credit at reasonable
terms) to certain categories of potential borrowers. That is one of the reasons why even
in highly developed financial markets like the United States government has intervened
in financial markets to promote mortgages, student loans, credit for small- and mediumsized businesses, credit for underserved communities, and rural credit. The argument for
such interventions in China, at its current stage of development, is even more compelling.
Increasing the flow of credit in these areas is particularly important if China is to succeed
in its objective of reducing the large disparities in income; and this is an example of a
kind of government action that can both enhance growth and equality – and that may
even help the structural adjustment of the economy away from exports.
In the United States (and many other countries), interventions have taken on a
number of different forms, and China would probably benefit from using a wide
portfolio of instruments: the creation of specialized banks and lending agencies; the
imposition of lending requirements to underserved communities and sectors (cf. the US
Community Reinvestment Act requirements); or the provision of partial guarantees or
limited subsidies. India has imposed requirements the effect of which is to increase
branches – and the availability of credit – in rural and more remote areas. Such requirements, if properly designed, can be made consistent with WTO obligation. Otherwise there
is a temptation, especially of foreign banks, to engage in ‘cream skimming’, providing
ample credit for large firms, but little credit, for instance, for domestic small- and mediumsized firms. Indeed, some recent studies suggest that in many countries, the entry of
foreign banks has actually led to an overall decrease in credit to these enterprises.
Perhaps the most important thing that China should do is to encourage the entry of
small- and medium-sized local banks. As I have argued elsewhere, the key to providing
credit is information; local banks are more likely to be relatively well informed about local
(small- and medium-sized) firms (Stiglitz and Greenwald 2002). Of course, China needs
simultaneously to develop the capacity to regulate and supervise small- and medium-sized
banks.
7.2 Risks and rewards of capital and financial market liberalization
The second is to recognize that capital or financial market liberalization, by itself, may not
lead to faster growth, but may contribute to greater economic instability. Even the IMF, in
its 2003 study (Prasad et al. 2003), has recognized that capital market liberalization had
brought risk without reward in many developing countries. It found the result surprising –
contrary to economic ‘theory’ – but it was contrary only to an economic theory based
on perfect information and infinitely lived individuals. More realistic models, based on
imperfect information,40 are fully consistent with the empirical findings. The implication
is clear: China must take extreme care as it liberalizes its financial and capital markets.
Regrettably, I do not have time today to describe in greater detail the appropriate set
of policies; but the complexity and risks strongly support a policy of gradualism. This
is especially true because there is a learning process, both for investors, regulators, and financial firms.

The third is to recognize that there may be important trade-offs among various objectives.
For instance, one can ensure the safety and soundness of the banking system by requiring
banks to hold only short-term government bills; but if that were done, banks would not
be able to fulfil one of their main functions: providing access to credit.
7.4 Adapting to the evolving Chinese market economy
The fourth is to recognize that the quickly evolving nature of China’s economy and
financial markets will require adaptable regulatory policies. For instance, as part of its
WTO accession agreement, there will be entry of foreign financial firms. Previously, the
financial system performed a number of social functions. It may not be possible for some
of these to be accomplished through financial systems41 – and the greater transparency,
e.g. of hidden subsidies, may be an ancillary benefit. In other cases, the ways in which
these objectives are attained will have to be changed; for instance, in order for there to
be adequate access to credit by small- and medium-sized firms, regulations such as CRA
requirements discussed earlier may have to be imposed.
One important aspect of China’s evolving market economy is the New Economic
Model, which places greater emphasis on domestic consumption. As we noted earlier,
one of the reasons that export-led growth played such a critical role in China’s earlier
development was that it allowed the country’s productive capacity to expand more rapidly
than its capacity to expand aggregate demand – its ability to ensure that investment
expenditures would be well spent, and its ability to ensure that consumers who might
gain access to credit would be able or willing to repay. Today, strengthened financial
institutions have a greater capacity to provide consumer loans (including mortgages). But
China should learn the lesson of other countries: financial institutions sometimes prey
on uninformed consumers, charging them exorbitantly high interest rates, and this may
be particularly the case in situations where consumers have little experience in debt.
Moreover, they often lend beyond individual’s capacity to repay, which can lead to stress
on the part of consumers, and, when sufficiently large numbers are unable to repay, stress
on the financial system as a whole. China needs strong consumer protection legislation,
rigorously enforced, and backed up with a debtor-friendly bankruptcy law that gives
lenders greater incentives to engage in due diligence to ensure that borrowers have the
capacity to repay.
8. Social insurance
It is now widely recognized that one of the reasons that China has such a high savings
rate is the absence of adequate social insurance;42 there are inadequacies in the public
provision of education, health, and retirement programs. Stronger public support of these
programs will help achieve two of the critical parts of the New Economic Model: it will
help China in its move away from export-led growth and in its attempt to reduce the
disparities in wellbeing among its citizens.43
But designing a good social insurance system is not easy, especially in a highly
competitive global economy. As I noted earlier, the Scandinavian countries have shown
that providing a strong social insurance program (including a strong public education
system) can actually provide a country with a competitive advantage. Competing in
the global market place requires a healthy, well-educated labour force, able to adapt to
the fast pace of changes. With risk taking so essential to success, a strong social safety net – combined with high levels of employments – enhances the ability and willingness
of individuals to undertake risk.
There is much discussion about the virtues of international trade – the gains provided
by a larger marketplace. But the economic gains that result from creating a strong national
economy are even larger. And a strong national economy requires labour mobility; and
labour mobility requires a national social insurance system.
Moreover, in the past, firms both in China and elsewhere were engaged in two separate
activities – production and the provision of social services. Competing in the global
market place requires separating out these functions, and that means that the government
must take on an increased role. As we noted earlier, there are sound economic and social
reasons why the provision of at least a basic level of social insurance cannot be left to the
market alone. Fortunately, China’s rapid growth means that there should be the resources
with which to begin to create a strong, national social insurance program.
9. Liveable cities
On several previous occasions, I have discussed the importance of the creation of liveable
cities. China is rapidly urbanizing.44 An increasing fraction of China’s population will
live in urban areas, and how these urban areas are designed will have enormous effects,
on the quality of life, the efficiency of the overall economy, and on the environmental
impact of China’s growth. Market forces by themselves will not lead to the creation
of liveable cities, and there are built-in incentives both for certain government officials
and for private sector entrepreneurs for the creation of urban sprawls and the design of
urban spaces that are counter to the principles that should underlie liveable cities. It is
especially important for governments to take action now, with a clear view of long-term
consequences of land usage patterns: the decisions made today, e.g. with respect to the
design of road networks, will have consequences for decades to come.
China has moved away from the planning model to a market system. But in this move
away from planning and to the market, there may not be sufficient appreciation of the
limits of the market. This is especially so in land usage. In most Western countries, city
planning is critical – the externalities that naturally arise are too large to be ignored, too
complex to be dealt with by a simple price system. The few cities that have tried to do
without planning serve as a reminder of why city planning is so important. To be sure,
zoning can also be a source of corruption both in the design of the plan and in the granting
of variations; there is no alternative to implementing strong policies of good governance.
10. Information systems
Well-functioning economies require good information; but there are systematic market
failures. Individuals often have incentives not to reveal relevant information, or worse,
to provide distorted information. Much of my theoretical work has been devoted to
understanding the problems that imperfect information poses for the functioning of a
modern economy.45 I have stressed the importance of good accounting systems, as well
as the dangers posed by certain conflicts of interest as well as the perverse incentives to
which stock option systems may give rise.
Some of my more recent research has been concerned with information problems
which arise within organizations, and in the public sector (see, for instance, Stiglitz 2003b).
Governments, too, need to have good information in order to make good decisions. There
are incentives of government officials not to disclose what is going on, either to citizens or to those to whom they are supposed to report. There is, of course, a need to have strong laws to avoid conflicts of interest just as there is a need for such laws in the
private sector. And just as successful private sector managers have learned that there is a
need to have a variety of channels of information, so, too, in the public sector. A vibrant,
responsible media can be one such channel. For it to be effective, it has to have access
to relevant information, which is why right-to-know laws (‘freedom of information acts’)
can be so important. The press also, of course, must be responsible; designing appropriate
libel laws is important. Unfortunately, such laws have often been abused, and in some
countries have vitiated the benefits which would come from an active and vibrant press.
11. Concluding remarks
I have argued here that China’s circumstances have changed, and that requires a different
model – and because China’s circumstances are different from that of other countries, the
model for China inevitably needs to be different from that of elsewhere.
Some three decades ago, China set forth on a new course. It talked about a pragmatic
policy of ‘crossing the river by feeling the stones’. The pragmatism that underlies this
approach is partially responsible for China’s enormous success.
Now that China has gone more than half way across the river, what is on the other
side is clearer. It is clearer that there are many different forms of a market economy –
many different places to land on the other side of the river. China can now see that it
can make a great deal of difference the directions which it takes. What kind of market
economy it chooses will affect what kind of society it will create.
Even as China crosses the river by feeling the stones, creating a market that is
consistent with China’s distinct circumstances and objectives will require a New Economic
Model. China’s 11th Five-Year Plan reflected this New Economic Model. In this paper,
I have tried to lay out some of the economic foundations underlying this New Economic
Model and to suggest some of the implications it may have for the design of policies and
institutions.
Acknowledgements
This essay is a revised version of remarks given at the China Development Forum,
Beijing, in March 2007. I am indebted to Mo Ji for helpful comments and suggestions, as
well as to conversations over the years with Larry Lau and Justin Yifu Lin, David Dollar,
Xie Fuzhan, Zhou Qiren, as well as other participants in previous meetings of the China
Development Forum. Justin Lin provided detailed comments on this draft, for which I
am particularly grateful.
Notes
1. An example is China’s use of the dual price system in the transition from the prices that prevailed
under planning to more market-based prices.
2. In the past two decades, 2.2 hundred million Chinese people have overcome absolute poverty,
which accounts for 75% of the population of poverty reduction in developing countries.
3. One standard measure of inequality is the Gini coefficient. China’s Gini coefficient increased
from 0.16 (before reform) to 0.47 (after 2005). By contrast, the US Gini coefficient
stands at 0.466, Japan’s at 0.249, and the Scandinavian countries at around 0.3. See
http://www.forbes.com/free_forbes/2005/1010/064.html.
4. See his lecture ‘Human development and health’ (Sen 2006). Sen also points out that Kerala’s
life expectancy is higher than that in every province of China, except for the urban conglomerates
such as Beijing and Shanghai. Infant mortality rates were comparable in 1979; now Kerala’s is
one third that of China’s.
5. Indeed, China perhaps should be given credit for having done as well as it has, given its low
expenditures on health – estimated to be between 2% to 3% of GDP (see http://earthtrends.
wri.org/text/environmental-governance/variable-642.html). (By contrast, the US spends approximately 15% of its GDP on health.
6. So evident in the United States, where in recent years, GDP has been increasing, while median
household income has been falling – even looking just at income, most Americans today are
worse off than they were five years ago; but if account is taken of the increased health insecurity –
with more than 46.6 millions without health insurance, a number that continues to rise every
year – the deterioration in standards of living is even more marked. See US Census Bureau
(2006).
7. In particular, my discussion focused on the so-called ‘market failures’, instances such as environmental externalities where markets by themselves may not lead to efficient outcomes.
8. Premier Wen Jiabao called attention to the critical shortfall in energy and pollutants: While
energy consumption per unit of GDP dropped by 1.2% in 2006 – an impressive achievement,
especially compared to the increases of 4.9%, 5.5%, and 0.2% in the previous three years –
the target was to reduce energy consumption per unit GDP by 4%. (Wen, 2007). Still, China’s
achievements in increasing energy efficiency and reducing emissions should be noted: between
1990 and 2002, China increased its CO2 emissions per unit GDP by more than 50%, while the
world average decreased by less than 20%. See Wang Mengkui et al. (2007).
9. Even as China has changed its economic model, it has continued to focus on broader objectives
than just increasing in GDP, i.e. equitable and sustainable increases in living standards. Measures
like green GDP and the UNDP’s HDI may provide a better measure of success than GDP per
capita.
10. The US would simply shift purchasing textiles, for instance, from China to Bangladesh or
Cambodia; these countries are more likely to spend the increased income thereby generated
in their own countries; and if they did decide to hold more foreign reserves, it is more likely
that they would hold a larger fraction of their reserves in the euro than in the dollar, which is
increasingly seen as a weak and weakening currency. For further elaboration on this, see Stiglitz
(2006b).
11. For an extended discussion of the advantages of export taxes over exchange rate revaluation,
see Lau and Stiglitz (2005).
12. This is particularly true because the financial sector in China is dominated by the four big state
banks. Only about 1% of the firms in China, mainly the large firms, have borrowed money from
banks. Due to the underdevelopment of small- and medium-sized banks which typically provide
credit to local, small- and medium-sized firms, small- and middle-sized enterprises and family
farms often do not receive financial services from banks and need to finance their investment
through their own savings, one of the factors contributing to China’s high savings rate.
13. The lending is done at the country level, though the purchases of the goods have occurred at
the level of individual firms and households.
14. It is even more peculiar to think of China having helped finance America’s huge fiscal deficit,
arising partly from the Iraq War, partly from the tax cut – for the richest people in the richest
country in the world.
15. I would argue, accordingly, that Korean Chaebols should not be a model of China’s business
organization.
16. Although it will still be important for China to guard itself against abusive lending practices,
and to adopt bankruptcy laws which do not reward financial institutions for making bad loans.
There is concern that recent changes in bankruptcy law in the United States have done just
that, and are contributing to stresses among lower- and even middle-income individuals, who
already face problems of stagnant incomes. These problems have been compounded by the fact
that more than 50 million Americans do not have health insurance; some studies suggest that
a significant fraction of individuals who are forced into personal bankruptcy have confronted
major medical expenses. There are important lessons from these experiences for China. China
is also expanding uncollateralized consumer debt, e.g. credit cards. The experience of Korea
provides a cautionary note, which Chinese regulators say they have taken into account.
17. One must be wary of these numbers. Some analysts argue that it represents a gross overestimate
of the ‘true’ trade surplus because a portion, possibly a substantial portion, of the sharp increase
in trade surplus is due to over-invoicing export and under-invoicing import by the trading
companies for the purpose of gaining from the anticipated RMB revaluation. Two ways to
discourage this practice are: (a) for the Chinese government to make it clear that the appreciation will not exceed, say 3–4% per year; and (b) for capital gains taxes to be imposed, at high rates,
especially on short term capital gains associated with currency appreciation. By contrast, some
argue that the large bilateral trade surplus with the US understates that surplus because some of
the imports to the US from places like Hong Kong are really of goods made largely in China.
18. For instance, according to the Economist Intelligent Unit (xxxx?), GDP in 2006 is estimated
to have grown at 11.1%, but rural and urban household consumption at only 8.6% and 7.6%
respectively (National Bureau of Statistics of China, 2007).
19. Technically, what is required is that the marginal propensity to consume out of income of the
rich is lower than that of the poor.
20. According to the 2004 Economic Census (National Bureau of Statistics of China, 2006), the
number of small industrial and commercial enterprises was 39.2 million; by 2006, the number
was reduced to 25.7 million.
21. Some have argued that China should rely on a privately financed healthcare system. No country
has succeeded in establishing a fundamentally private healthcare system that both is efficient
and provides adequate care for the poor. America has among the most privatized healthcare
systems among the advanced industrial countries; healthcare expenditures as a percentage of
GDP is the highest in the world, and healthcare outcomes are far poorer than those in other
advanced industrial countries of comparable income. Standard theories of asymmetric information (particularly focusing on adverse selection) explain why private provision of healthcare
insurance is inefficient, marked in particular by high transaction costs. Some of the recent
‘reforms’ encouraging private insurance have exacerbated problems of ‘cream skimming’, and
are probably contributing to the increasing problems of lack of coverage.
22. As always, there is some debate about the numbers. Some argue that GDP and savings are
both overstated, because included in real estate investment is the value of land (there are often
large capital gains associated with real estate developments; value of the capital gain on the
land should be treated as a transfer payment, but typically is not). Others argue that there
is underreporting of services; an earlier correction lead to a marked decrease in the savings
ratio; some argue that there is still some underreporting. Finally, some believe that there is
overreporting of exports and underreporting of imports, as part of circumvention of short-term
capital controls. In this view, a substantial part of the current account surplus is speculative
capital flows. Taking this into account would again lower the domestic savings rate.
23. Even within the advanced industrial countries, there are huge disparities between best and
average practices, implying there is typically considerable scope for increases in overall
efficiency.
24. I argued similarly in my book Making globalization work, Chapter 8 (Stiglitz 2006b).
25. With each country keeping the revenue from the carbon tax, the distributional consequences arise
from the differences in the deadweight losses associated with the imposition of the carbon tax
relative to the imposition of alternative taxes. In many cases, the switch towards a carbon tax
would actually be welfare enhancing. Even for countries that have already optimized their tax
structure, the social cost is measured by the difference in the Harberger triangles, and the differences
in the social cost are related to the differences in these differences, which are likely to be small.
26. There are several reasons why a poorly designed patent system may impede the pace of
innovation. Knowledge is the most important input into the production of knowledge; by making
knowledge less accessible, the pace of innovation will be reduced. This can be partially mitigated
by disclosure requirements; interestingly, some advocates of strong intellectual property rights
have argued that disclosure violates their property rights. As we shall explain later, all rights
are associated with responsibilities, and one of the responsibilities long associated with good
intellectual property regimes is a responsibility of full disclosure.
Another reason is that intellectual property can lead to increased monopolization, and it has
long been recognized that monopolies have less of an incentive to innovate than do competitive
markets. The ability of a monopolist like Microsoft to squash successful innovators like Netscape,
who innovated in the area of browsers, and RealNetwork, which innovated in the area of media
players, almost surely has an enervating effect on innovation – another reason why countries
need strong anti-trust laws.
Still a third problem arises from ‘patent thickets’, the uncertainties that innovators face that
their innovation will trespass on the intellectual property on others.
27. The fact that there is no single best IP system is exhibited by the conflicts of views over the use
of labelling, where many European countries arguing for tight protection of the use of labelling
(e.g. of names like Parma ham) and the US, which more often copies these labels from other countries, arguing on the other side. For China, the development of strong trademark protection
is important in providing incentives for the development of brand name reputations associated
with the production of high quality goods.
28. The prize system works best when there are well-defined objectives – a cure for a disease, a
light long-lived battery for running a car, a more fuel efficient engine. The Royal Society of
Arts in the UK has long advocated and used prizes for stimulating innovation.
29. For a fuller discussion of the prize system, and the problems with the patent system, see my
recent book Making globalization work, Chapter 5 (Stiglitz 2006b).
30. There are a host of examples of this. Developing countries have been particularly concerned
with ‘biopiracy’, the patenting of traditional knowledge. Among the oft-cited examples are the
patents granted by the US for basmati rice, the healing properties of turmeric, and neem oil.
31. For instance, the dynamic benefits of extending the lifetime of copyright (especially for
copyrights already granted) to 70 years beyond the lifetime of the author almost surely were
less than the static costs.
32. One of the reasons is that the US and the drug companies often put enormous pressure on
countries not to issue these compulsory licenses.
33. There is broad consensus within these countries about the desirability of their model, though, as
usual, there are differences in views concerning ‘fine tuning’ of the system. Thus, the recently
elected government in Sweden has called for some reduction in social benefits – but even with
those reductions, the level of social protection will be far stronger than, say, in the United States.
34. These ‘transaction costs’, of course, provide much of the motivation: they represent an important
source of income to financial markets.
35. This view is often associated with Ronald Coase (1960), and has been popularized by Hernando
De Soto (2000). It was suggested, for instance, that even problems of externalities could be
handled efficiently; ‘all’ one had to do was to determine who had the property rights over air.
In fact, however, Coase’s ‘conjecture’ about the role of property rights has been shown to have
limited applicability: there has to be essentially perfect information and zero transaction costs.
With transactions costs and imperfect information, Coasian bargaining will in general lead to
inefficient resource allocations. But even were Coase’s conjecture correct, in some sense, it
would leave open the difficult question of the assignment of property rights, which could have
large distributional consequences.
36. Earlier, in the 1950s, AT&T agreed in response to anti-trust action against it to make its patents
available to others.
37. As a result of exacerbating the significance of agency costs, e.g. associated with tenancy
relationships. See, e.g. Braverman and Stiglitz (1989, 185–201). Mild restrictions on property
rights – for instance, allowing workers to borrow against the produce of the land, but not against
the land itself – can reduce the likelihood of these undesirable outcomes.
38. There are important administrative issues concerning the point of collection, which I do not
have time to address here.
39. For a discussion of implications of imperfect information for monetary policy, see Stiglitz
(2004a, 2006a).
40. And individuals with finite lives. See, e.g. Stiglitz (2004b). For a discussion of why financial
market liberalization may not be desirable, see, e.g. Stiglitz and Greenwald (2003).
41. For instance, subsidizing loss-making, state-owned enterprises.
42. Justin Lin has argued that this is far from the most important reason, simply because the
real reason that national savings is so high has to do with high corporate savings, not high
household savings. In fact, Chinese households’ saving is not particularly high compared to
other developing countries. For example, China’s household saving in 2005 was 16% of GDP,
and even at its peak, in 1996, it was only 20% of GDP, whereas India’s was 22%. What makes
China’s saving rate so high is the corporate saving, which is more than 20% of GDP.
43. Better private insurance would also reduce the need for precautionary savings; but especially in
the area of health, there cannot be reliance on private insurance. Private insurance will devote
excessive efforts to ‘cream skimming’, resulting in high transactions costs and large distortions.
44. For instance, the urbanization level increased from 36.2% to 43% in the five years from 2000 to
2005. The increased percentage of urbanization was larger than that in the 25 years from 1953
to 1978. See Wang et al. (2007).
45. See, for instance, my Nobel lecture, ‘Information and the hange in the paradigm in economics’
(Stiglitz 2002). My book Roaring Nineties (Stiglitz 2003a) provided a popular account of how these information imperfections had led to the bubble of the 1990s, and its subsequent crashing,
at such cost to the American economy.
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