Papers

Publications

"Taobao, Federalism, and the Emergence of Law, Chinese Style," with Barry R. Weingast, Minnesota Law Review, 2018, Vol. 102, No.4

[Abstract][PDF]

"Connecting the Countryside via E-Commerce: Evidence from China," with Victor Couture, Benjamin Faber, and Yizhen Gu, American Economic Review: Insights, Forthcoming

[PDF][Online First][Data]
Policy Briefs: [Article on VoxChina][Article on VoxDev]
Featured in World Trade Report 2018, World Development Report 2020, J-PAL, World Bank Blog
[Paper Summary in Chinese ]
Abstract: This paper estimates the impact of the first nation-wide e-commerce expansion program on rural households. To do so, we combine a randomized control trial with new survey and administrative microdata. In contrast to existing case studies, we find little evidence for income gains to rural producers and workers. Instead, the gains are driven by a reduction in cost of living for a minority of rural households who tend to be younger, richer and in more remote markets. These effects are mainly due to overcoming logistical barriers to e-commerce, rather than to additional investments to adapt e-commerce to the rural population.
Key Words: E-Commerce, trade integration, economic development, rural-urban divide

Working Papers

"The Rise of Data Politics: Digital China and Evolving International Relations"

Working paper upon request
Abstract: Data has become one of the most valuable assets for governments and firms. Yet we know surprisingly little about how data reshapes international economic relations. This paper explores various aspects of data politics through the lens of China’s digital rise and the country’s global engagement. I start with the theoretical premise that data differs from traditional strategic assets (e.g., land, oil, and labor) in that it is nonrival and partially excludable. These characteristics have generated externality, commitment, and valuation problems, triggering three fundamental changes in China’s external economic relations. First, data’s externality problem makes it necessary for states to regulate data, or even to pursue data sovereignty. But clashes over data sovereignty can ignite conflicts between China and other countries. Second, the commitment problem in data use raises global concerns about privacy and foreign government surveillance. As data is easier to transfer across borders than physical commodities, Chinese tech companies’ investment abroad is vulnerable to national security investigations by foreign regulators. Chinese tech companies therefore confront a “deep versus broad” dilemma: deep ties with the Chinese government help promote their domestic business but jeopardize their international expansion. Lastly, data’s valuation problem makes traditional measures (e.g., GDP) ill suited to measure the relative strengths of the world’s economies, which may distort perceptions of China and other states.
Key Words: China; Data; Digital Economy; Political Economy

"Law, Chinese Style: Solving the Authoritarian’s Legal Dilemma through the Private Provision of Law," with Barry R. Weingast

[PDF]
Abstract: How do authoritarian states build the institutional infrastructure (e.g. secure property rights, contract enforcement, and the rule of law) necessary to support efficient markets? Tremendous political impediments hinder states from developing the rule of law. The path for the West involved parliaments and independent judiciaries that constrained the ruler. China’s path differs considerably; from the beginning, it involved the delegation of authority from the central government sometimes known as “federalism, Chinese style.”
China’s problem with creating the rule of law governing markets is made worse by the “authoritarian’s legal dilemma”; that is, the creation of a strong, non-corrupt judiciary that would supply and only supply private law (e.g., secure property rights, contract enforcement). Although China wants to improve its private law, it wants to avoid an independent judiciary that might challenge and constrain the central government.
Using China’s online market as the context, this paper explains how new institutional rules are devised in a weak legal environment, and how Taobao – a Chinese online trading platform – has the means to create law, Chinese style. The Chinese government has effectively off-loaded a substantial part of the development of law to private actors. Taobao – China’s dominant online trading platform with over 440 million active users – is not simply an exchange platform, but one in the process of developing a modern legal system that enforces contracts, resolves disputes and prevents fraud. As a private supplier of market infrastructure where formal institutions are lacking, Taobao essentially provides a means for creating law, Chinese style. We argue that law, Chinese style, parallels China’s earlier reforms (1980s-early 1990s) which helped create federalism, Chinese style, that provided the political foundations of early market reform. The new form of delegation also involves a combination of authority and policy experimentation. From the standpoint of the central government, one major advantage of this approach to legal development is that it is much less politically constraining on the central government than the Western approach to public legal systems.
Key Words: Law and development, market legal infrastructure, authoritarian regimes, e-Commerce platforms

"Regulatory Protection and the Concentration of Trade: Evidence from Chinese Customs Data," with Robert Gulotty, Xiaojun Li, and Wei Lin

[PDF]
Abstract: To comply with the demands of increasingly regulated markets, firms today must label, package or even rework products to meet the high standards of the destination market. These technical barriers to trade (TBT) can raise prices and perhaps quality, but firms may also respond by moving out of the market entirely or rerouting their trade through third countries. In the former case, top firms enjoy monopolistic rents. In the latter case, firms seeking to meet a standard in a country may shift transit trade toward countries with similar regulatory levels as the destination market. The consequences could be dire for smaller exporters and developing markets that have enjoyed at least some of the rents associated with transit trade. To study these effects, we examine the effects of regulatory protection on the flow of China’s exports between 2000-2007, drawing on a unique dataset that covers the universe of over 130 million customs transactions reported by Chinese firms at the level of the shipment, including price, quantity, and the country of transit prior to arrival at the final market. During this period, China’s exports quadrupled and its trading partners adopted hundreds of regulatory barriers to trade. Joining the customs data with the catalogue of regulatory barriers collected by the World Trade Organization, we examine the consequences of these regulatory barriers for the margins of trade, both across firms and across transit countries, and, for the first time, map the geography of trade for the largest exporter in a world of regulated markets.
Key Words: Regulatory barriers to trade, international trade, customs data

"Firms under Fire: Market Liberalization, Commercial Interests and China's Economic Statecraft toward North Korea," with Robert Gulotty, Xiaojun Li, and Wei Lin

Work in Progresss

"Opium for the Masses? Field Experimental Evidence on How Consumption Shapes Political Beliefs," data analysis

Other Publications

*All related to fieldwork

Op-ed, Financial Times, “E-commerce Can Ease Social Ills in China’s Villages,” with Wesley Koo (Stanford),

Original FT Article [Link]
Translation in Chinese by FTchinese [Link]

Op-ed, The Paper, “Observations from Taobao (e-Commerce) Villages,” in Chinese [Link]

Book Chapter, “Junpu: The E-Commerce Village,” with Yi Wang (SWUFE), in China's Taobao Villages. Beijing, China: Electronic Industry Press, 2015, in Chinese, translated into English and released in India and the UK