A New Form of Governance or the Reunion of the Government and Business Sector? A Case Analysis of the Collaborative Natural Disaster Insurance System in the Zhejiang Province of China

ABSTRACT

The purpose, structure, and outcomes of cross-sector collaborations are subject to the institutional environment from which they emerge. This article examines how institutional background could determine the nature of cross-sector collaborations through a case study of the collaborative natural disaster insurance system in the Zhejiang Province of China. Although a guiding principle of reform in China asserts that the system should be operated based on market mechanisms, we find in practice that a market for insurance is far from being established. Insurance products are primarily designed by the government and marketed through administrative mobilization instead of market channels. Business organizations take a passive role, without attempting to create new insurance products, while enjoying monopolistic benefits created by connections to the Chinese government. The emerging government and business collaboration in China may not represent a new governance form to maximize efficiency, but instead a reunion of the government and business sector after years of efforts of separating public and private powers.

ACKNOWLEDGEMENTS

We greatly appreciate Professor Jianmin Song at Shanghai University of Finance and Economics for her help in our fieldwork. Financial support for the research was provided by International Development Research Centre (Project Number 105899-011), the Humanities and Social Science Research Projects of Ministry of Education of China (Project Number 10YJC630231), and the National Natural Science Foundation of China (Project Numbers 71202008 and 71202071). The sponsors played no part in the study design; in the collection, analysis, and interpretation of data; in the writing of the article; nor in the decision to submit the article for publication.

Notes

Source: Statistics Report of Ministry of Civil Affairs (1990–2007).

Note: Data about the U.S. national flood insurance are from Kunreuther and Michel-Kerjan (2009) and the Web site http://www.fema.gov/business/nfip/wyo.shtm.

This information is based on interviews in Cangnan County, which is a relatively less developed county in Zhejiang.

Additional information

Notes on contributors

Feng Wang

Feng Wang is an Associate Professor in the School of Public Economics and Administration at Shanghai University of Finance and Economics. She received her PhD in Public Administration from the University of Southern California. Her research interests include neighborhood governance, environmental policy and management, and public and nonprofit management. Her papers have appeared in Management and Organization Review, Energy Policy, Geoforum, and Public Performance & Management Review, among others.

Haitao Yin

Haitao Yin ([email protected]) is an Associate Professor in the Antai College of Economics and Management at Shanghai Jiao Tong University. He received his PhD in Business and Public Policy from the Wharton School of University of Pennsylvania. His research interests include environmental policy, environmental insurance, and renewable energy policy. His papers have appeared in the Journal of Law and Economics, Risk Analysis, Energy Journal, and Energy Policy, among others.