Book Review of  Tamar Groswald Ozery, Law and Political Economy in China: The Role of Law in Corporate Governance and Market Growth (Cambridge University Press 2023)

As the title of her book suggests, in Law and Political Economy in China, Groswald Ozery frames her investigation of the role of law in Chinese capital market growth in broad conceptual terms. The basic question she poses goes beyond the study of corporate law and may be described as follows. Over the past four decades, the Chinese government appears to have made sustained and sizeable investments in building a legal system. While barely operational in the early 1980s, Chinese law today is dense, multifaceted, propelled by a gigantic economy, and hard to dismiss. At the same time, Western scholars who have studied various aspects of Chinese law often conclude that Chinese legal institutions and norms fall short in terms of protecting private property rights, limiting government interventions, and offering policy predictability. Not only does the juxtaposition of these flawed institutions and norms against China’s spectacular economic growth generate intellectual dissonance, the dissonance is also particularly jarring because the law is not entirely missing in action. The extensive Chinese legal system might be doing something, just not what traditional institutional economics says law should do. What, then, has law done for Chinese economic growth?