Economic change is a process of continual adjustment to new circumstances. Economies are always in the process of becoming. Good economic policy entails pragmatic adjustment so that economic dystrophy is avoided. The experience of economic (institutional) reform in China since 1978 is drawn on—and explained—to illustrate the extent to which Deng’s reforms represent the pragmatist’s focus on the practical effects of purposeful actions. Economies rest on an evolving institutional foundation. Deng understood this and used it to bring China to the forefront of the world’s economic stage. Here is an account of how he managed that transition.
Daniel W. Bromley is Anderson-Bascom Professor of Applied Economics at the University of Wisconsin-Madison. He is listed in Who’s Who in Economics, and is a Fellow of the American Agricultural Economics Association. He has written or edited 11 books, the latest of which is Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions (Princeton University Press, 2006).
Yang Yao is Deputy Director of the China Center for Economic Research at Peking University in Beijing. He holds a Ph.D. from the University of Wisconsin-Madison. He has been engaged in economic research on China’s transition for a number of years, and he has written widely on that subject.