This book is about the way institutions affect policy making in China. In particular it looks at the role of coalitions of economic bureaucracies in shaping Chinese macroeconomic policy in 1956–1957, and at how these institutions contributed to the Great Leap Forward. In contrast to most accounts of the origins and development of the Great Leap, this work finds that many of the economic policies associated with the Leap were in fact first advocated by a coalition of planning and heavy industrial interests. Instead of Mao's formulating ideas on self-reliance, industry's aiding of agriculture, emphasis on medium- and small-scale industry, and decentralization, the two top planners of the People's Republic of China, Li Fuchun and Bo Yibo, were the first to suggest and champion these policies in the spring and summer of 1957. To be sure, Mao bears ultimate responsibility for the catastrophe caused by the Great Leap and its millions of deaths due to starvation and malnutrition, but he did not formulate some of the most salient actions of this frenetic period of Chinese history.

This finding, that the planners advocated what later were called Maoist economic policies, raises fundamental questions. First, why would the planners advocate a platform of economic measures that seem to undermine their own role in the political and economic system? Second, why would Mao and the Chinese Communist Party (CCP) adopt such a package?

In contrast to the coalitions examined in the two preceding chapters, the Chinese Communist Party (CCP), as the agent of social transformation, is not predominantly concerned with economic issues. The function of social transformation is to restructure and reform society and social relations. In most revolutionary societies in the twentieth century, and certainly in China, the Communist Party is the special institution of social transformation. The Communist Party, once it seizes power, also provides overall leadership in the political system and mediates the relationships among the other intrastate coalitions. The Communist Party, then, is both above the other coalitions (this is particularly true of the central leadership) and the embodiment of one particular coalition. In its capacity as the organization charged with social transformation, the Communist Party is different from other ruling parties in one-party states. In Benjamin Schwartz's elegant characterization,

After completion of the “Socialist Transformation of Capitalist Industry, Handicrafts and Commerce” and the collectivization of agriculture, the CCP had apparently completed its mission. Following the Soviet model, there was nothing left to be transformed – China had arrived at socialism (state ownership).

This chapter presents a broad framework for analyzing institutional and leadership interactions in China. As noted in Chapter 1, this framework is heavily influenced by the “new institutionalism” literature. Much of this recent literature, however, focuses on democratic or authoritarian political systems with market economies and therefore cannot be applied easily to the study of communist nations with planned economies. The lines of cleavage in communist societies are different from those in democratic or authoritarian systems, and the all-encompassing nature of the state apparatus in a communist country makes moot much of the debate about the role of the state (versus societal influences). Yet despite these differences, there are still significant insights to be gained from this approach.

The following thirteen propositions about organizations, institutional alignments, the nature of the Chinese state, and the relationships among institutions and leaders in China should not be seen as deductive axioms on which the remainder of the chapter expands. They reflect basic steps in the argument that are developed in the course of the study and are offered to make the logic of the analytical framework as explicit as possible. These statements are phrased quite generally, and most are China-specific, although they may apply to other states as well.