Tocquevillian Moments: Charitable Contributions by Chinese Private Entrepreneurs

Abstract

Using a 1995 national survey of 2,870 Chinese private entrepreneurs, this article examines collaboration between private business and government in times of economic transition. Much as in the late 18th century situation in France as descri bed by Tocqueville, special moments occur when a newly emerging business class offers monetarypayments for charity and for honorary offices. In exchange, the government, desperate for new sources of revenue, provides social recognition and political access. The data suggest that into at least the 1990s Chinese private entrepreneurs donated generously to government welfare projects, and in exchange gained political access and social status via appointment to political councils.There can be few, if any, para//els for this intense desire of the middleclass Frenchman to cut an official figure; no sooner did he find himself in possession of a smal/ capita/ sum than he expended it on buying an official post... (Tocqueville [1858(Tocqueville [ ] 1955. Generally speaking, an investment in office was an investment in standing.What made it desirable was the status, the respectability that it conferred. (Taylor 1967:478).Tocqueville and Taylor were speaking of pre-1789 France, a moment when the state and the emerging bourgeoisie compromised because the state needed revenue and the bourgeoisie wanted status enhancement and protection from onerous bureaucratic fees. In exchange for the purchase of newly created official positions, the state conferred status and protection for newly affluent groups in society (Garrioch 1996). Similar patterns emerged in other commercializing societies in the late 1700s (e.g., England and Russia), with honorific titles and noble status granted in exchange for contributions and exceptional service by businessmen (Rieber 1982:33-38). The thrust of this paper is that in rare moments, when the business class has little access to power or prestige and when the government is short of revenue, special exchange relations between business and government emerge.

Corporate Social Responsibility Reporting in China: Symbol or Substance?

“…Sometimes it owns property rights; other times its influence is less direct. As state-owned ventures have been argued to "have legitimacy and receive support or even protection from the government agencies that have founded them" (Li and Zhang 2007, p. 794), we argue that SOEs have the most political legitimacy and therefore the least need to use activities such as CSR reporting to seek preferred status and associated resources from the government Zhang 2007, Ma andParish 2006). As Brown (1998, p. 35, italics in original) noted, "Legitimate status is a sine qua non for easy access to resources, unrestricted access to markets, and long term survival."…”

“…Specifically, we examine how key features of a firm's political embeddedness that shape its need for legitimacy-e.g., state versus private ownership (Chen 2007, Li and, network connections to national political congresses (Hillman 2005, Ma andParish 2006), political legacy (Kriauciunas andKale 2006, Marquis andHuang 2010), and financial resources-result in firms being more or less likely to follow government signals.…”

Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms

“…Therefore: There is some rationale suggesting that achieved political connections might also serve as a buffer from governmental pressure, providing political clout that may allow firms to fend off external claims. And executives who lack political connections may be more active in making donations to create goodwill with the government, with the purpose of cultivating political connections (Ma and Parish 2006). While these arguments may apply under some conditions that we elaborate below, we argue that on average, achieved political connections are more likely to bind firms to the government and thus facilitate donation.…”

“…Government control of resources also makes it possible for the government to co-opt businesses/elites by granting resources and legitimacy in exchange for conformity. Accordingly, corporate executives strive to maintain goodwill with the government-including through making charitable donations (Ma and Parish 2006). Meanwhile, the government also seeks to co-opt business leaders as a means of maintaining control of the economy and society (Dickson 2003).…”

“…Thus, prior research has shown that managerial political connections are a key lever through which the government can shape corporate charitable donations (Ma and Parish 2006).…”