Ji Ma, Simon DeDeo

Paper #: 16-06-011

In response to failures of central planning, the Chinese government has exper- imented not only with free-market trade zones, but with allowing non-pro t foundations to operate in a decentralized fashion. A network study shows how these foundations have connected together by sharing board members, in a structural parallel to what is seen in corporations in the United States. This board interlock leads to the emergence of an elite group with privileged network positions. While the presence of government officials on non-pro t boards is widespread, state officials are much less common in a subgroup of foundations that control just over half of all revenue in the network. This subgroup, associated with business elites, not only enjoys higher levels of within-elite links, but even preferentially excludes government officials from the nodes with higher degree. The emergence of this structurally autonomous sphere is associated with major political and social events in the state-society relationship.