Experimentation under hierarchy

China changed many of its economic institutions after 1978 without a blueprint. Sebastian Heilmann argues that this was done through a distinctive process of 'experimentation under hierarchy': local governments try out new policies with the approval or tolerance of higher levels, successful experiments are spread step by step from 'point to surface', and failures are stopped. Local initiative is combined with central authority to select, revise and scale up.

Heilmann (2008) distinguishes three main instruments: experimental regulations issued on a provisional basis, experimental points (shidian) where a policy is piloted in selected units, and experimental zones with broad discretion, of which the special economic zones are the best known. He traces the method to the Communist Party's revolutionary base areas before 1949, where Mao and others developed the practice of testing a policy in one place before generalising it. With Elizabeth Perry he described the result as 'adaptive governance', and in Red Swan (2018) he argued that such unorthodox policy-making helps explain China's rise. Chenggang Xu's related account of China as a 'regionally decentralized authoritarian' system stresses that the centre controls personnel while subnational governments run much of the economy, which makes local experiments possible and gives officials incentives to compete.

• Rural decollectivisation: the household responsibility system spread from villages in Anhui and Sichuan in the late 1970s and was endorsed nationally in the early 1980s.
• Special economic zones, starting with Shenzhen, Zhuhai, Shantou and Xiamen in 1980.
• Pilots of state-enterprise restructuring, land-use rights and financial reform.
• Free trade zone pilots since Shanghai in 2013.

Pilot sites are often chosen because they are likely to succeed, and local officials have incentives to report success, so 'what works' in a pilot may not work elsewhere. Experimentation happens only where the centre allows it: political reforms such as competitive township elections were piloted in the 1990s and 2000s but not generalised. Several studies argued that Xi Jinping's emphasis on 'top-level design' and the anti-corruption campaign made officials more risk-averse and reduced experimentation; Heffer and Schubert (2023) counter that local governments are still expected to innovate and are now pressured to do so. Whether experimentation caused China's growth or merely accompanied it is a matter of interpretation.

Experimentation under hierarchy is widely accepted as a description of how many Chinese economic reforms were made. It has become a reference point for designing pilots elsewhere, and for comparison with federal 'laboratories of democracy', where experiments are driven by elected subnational governments rather than authorised from above.