Weak State, Strong Networks: The Institutional Dynamics of Foreign Direct Investment in China. By Hongying Wang. [Hong Kong: Oxford University Press, 2001. xiii+211 pp. HK$150.00. ISBN 019-590631-4.]

Extract

This is a competent work that challenges the claim of new institutional economics and international regime theory that effective state institutions in the host country are vital to the inflow, and indeed growth, of foreign direct investment (FDI). It argues that the large amount of FDI China has attracted so far has been facilitated more by the informal societal institutions represented by strong personal networks operating in the country than by the formal state institutions manifested by the weak legal system. The author validates her arguments with a large number of anecdotes based on over 100 interviews she conducted in China.