Unorthodox ownership and governance structures in East Asia

This study examines the nature of the unorthodox ownership and governance structures which are emerging among firms and the way these structures are supporting the remarkable economic growth in the transition economies of East Asia, as represented in particular by China and Vietnam. These economies are embarked on a distinctive process of property rights reform that resists widespread privatization in favour of evolutionary transformation. Following a brief description of the 'ownership puzzle' in transition economies, the study provides a general framework for understanding property rights reform in the transition economies of East Asia. This covers issues such as the evolutionary perspective of organizations and property rights as a bundle of rights. Section 3 examines the reform of property rights in the state-owned enterprise (SOE) sector in China, Vietnam and Laos and evaluates the impact of the reform on the performance of SOEs. Section 4 describes the features of the ownership and governance structures of township and village enterprises (TVEs) in China and analyses the importance of these features for liability and incentives. Section 5 examines the ambiguities of property rights arrangements among private enterprises in these economies and outlines the comparative benefits and costs. Section 6 presents a summary of the features of heterodox ownership and governance structures and then explores the distinction between 'ownership of the asset' and 'ownership of the firm' and the perspective of thinking the latter as 'state-contingent ownership'