Explaining regional economic policies in China: interest groups, institutions, and identities

What explains variation in investment climates across China's provinces and urban autonomous regions? Three main explanations are considered: variation in the character and size of economic interest groups, in central government policies, and in pre-communist provincial identities and traditions. There is statistical and anecdotal support for the interest group and provincial identity factors. On the other hand, there is little evidence that variation in central government policy has had much effect. Future work should refine statistical tests and case studies to better understand the joint influence of interest group pressures and provincial identities.