Y Qian et al./ European Economic Review 43(1999)1085-1094 when the rest of the economy was still under central planning. After a few years, most of the successful practices experimented with inside the Special Economic Zones were adopted nationwide Privatization of small-and medium-sized soes in china in the mid-1990s has followed a pattern similar to agricultural reform in the late 1970s. Experiments began in some counties, such as Yibin of Sichuan, Shunde of Guangdong, and Zhucheng of Shandong, around 1993. County governments have major respon sibilities in coordinating all the related policies, such as changes in corporate governance,ownership structure, dealing with bad debts, etc. The successful experiments have started to be imitated by other regions In recent years, Chinas state sector began to lay off excess workers. About ten million workers were laid off by the end of 1996, and an additional 5.6 million workers were laid off in the first half of 1997. The Chinese government again took an experimental approach by delegating responsibilities to municipal governments to coordinate the layoff and reemployment of SOE workers Referen Blanchard, O, Kremer, M 1997. Disorganization. Quarterly Journal of Economics 112(4), 1091-1126 Chandler, A Jr. 1962. Strategy and Structure. Doubleday, New York. Dewatripont, M Roland, G. 1995. The design of reform packages under uncertainty. American Economic Review 85(5). 1207-1223 Granick, D, 1990. Chinese State Enterprises: A Regional Property Rights Analysis. University of Chicago Press, Chicago, IL. Maskin, E, Qian, Y, Xu, C, 1997. Incentives, information, and organizational form. DDP 618 Harvard Institute for International Development, Cambridge, MA McMillan, J, Naughton, B, 1992. How to reform a planned economy: Lessons from China. Oxford Review of Economic Policy 8, 130-143. Milgrom, P, Roberts, J., 1992. Economics, Organization, and Management. Prentice-Hall, Engle- wood Cliffs. NJ. Nove, A, 1980. The Soviet Economic System. 2nd ed, Allen&Unwin, Boston, MA. Qian, Y Xu, C, 1993. Why Chinas Economic reform differ: The M-form hierarchy and entry/expansion of the non-state sector. Economics of Transition 1(2), 135-170 Qian, Y, Roland, G, Xu, C, 1997. Coordinating changes in M-form and U-form organizations. Mimeo, Stanford University, ECARE and London School of Economics. Roland, G, Verdier, T. 1996. Transition and the output fall. Mimeo, ECARE, Brussels. Sachs, J, Woo, W.T. 1997. Understanding Chinas economic performance. Mimeo, Harvard University, Cambridge, MA. Williamson, O, 1975. Markets and Hierarchies. Free Press, New York.when the rest of the economy was still under central planning. After a few years, most of the successful practices experimented with inside the Special Economic Zones were adopted nationwide. Privatization of small- and medium-sized SOEs in China in the mid-1990s has followed a pattern similar to agricultural reform in the late 1970s. Experiments began in some counties, such as Yibin of Sichuan, Shunde of Guangdong, and Zhucheng of Shandong, around 1993. County governments have major respon￾sibilities in coordinating all the related policies, such as changes in corporate governance, ownership structure, dealing with bad debts, etc. The successful experiments have started to be imitated by other regions. In recent years, China's state sector began to lay o! excess workers. About ten million workers were laid o! by the end of 1996, and an additional 5.6 million workers were laid o! in the "rst half of 1997. The Chinese government again took an experimental approach by delegating responsibilities to municipal governments to coordinate the layo! and reemployment of SOE workers. References Blanchard, O., Kremer, M., 1997. Disorganization. Quarterly Journal of Economics 112 (4), 1091}1126. Chandler, A. Jr., 1962. Strategy and Structure. Doubleday, New York. Dewatripont, M., Roland, G., 1995. The design of reform packages under uncertainty. American Economic Review 85 (5), 1207}1223. Granick, D., 1990. Chinese State Enterprises: A Regional Property Rights Analysis. University of Chicago Press, Chicago, IL. Maskin, E., Qian, Y., Xu, C., 1997. Incentives, information, and organizational form. DDP 618. Harvard Institute for International Development, Cambridge, MA. McMillan, J., Naughton, B., 1992. How to reform a planned economy: Lessons from China. Oxford Review of Economic Policy 8, 130}143. Milgrom, P., Roberts, J., 1992. Economics, Organization, and Management. Prentice-Hall, Engle￾wood Cli!s, NJ. Nove, A., 1980. The Soviet Economic System. 2nd ed., Allen&Unwin, Boston, MA. Qian, Y., Xu, C., 1993. Why China's Economic reform di!er: The M-form hierarchy and entry/expansion of the non-state sector. Economics of Transition 1 (2), 135}170. Qian, Y., Roland, G., Xu, C., 1997. Coordinating changes in M-form and U-form organizations. Mimeo., Stanford University, ECARE and London School of Economics. Roland, G., Verdier, T., 1996. Transition and the output fall. Mimeo., ECARE, Brussels. Sachs, J., Woo, W.T., 1997. Understanding China's economic performance. Mimeo., Harvard University, Cambridge, MA. Williamson, O., 1975. Markets and Hierarchies. Free Press, New York. 1094 Y. Qian et al. / European Economic Review 43 (1999) 1085}1094