Professor Xu Fengzeng is a professor and doctoral supervisor at the School of Management of Shandong University, Director of the Research Center of Service Strategy and Service Management of Shandong University, Deputy Director of Shandong Economic Management Research Base, and academic backbone of the Ministry of Education’s innovation team, “Industrial Organization and Enterprise Growth”. He participated in the 16th Batch of Doctoral Service Mission of the Organization Department of the CCCPC and the Central Committee of the Communist Youth League of China, worked as the Assistant to the President of Guizhou Education University, and was responsible for the founding of the Guizhou Tourism Research Institute. He has been engaged in the research of rural tourism, tourism entrepreneurship, and service innovation, and has presided over more than 10 national and provincial programs, such as the General Program of the National Natural Science Foundation of China and the Youth Program of the Ministry of Education Foundation on Humanities and Social Sciences. He has published more than 30 papers in Tourism Management (SSCI, Q1), Journal of Hospitality Marketing & Management (SSCI, Q1), Journal of Hospitality & Tourism Research (SSCI, Q1), Management World, Journal of Shandong University (Philosophy and Social Science), Journal of Central University of Finance & Economics, etc. He has also published a number of academic monographs, including Industrial Analysis and Enterprise Growth, Tourism Entrepreneurship Theory and Case Study, Green Paper on Development of Tourism and Hotel Industry in Shandong Province (2010), The Growth of Hotel Enterprises, and Research on Industrial Organization under Economic Globalization.
Professor Xu Yuehua is a professor, doctoral supervisor, and Qilu Young Scholar at the School of Management of Shandong University, who graduated from the Business School of the Chinese University of Hong Kong in December 2012 with a PhD degree in Management. Her main research areas include corporate social responsibility, corporate governance, strategic leadership, and rural enterprises. She is currently leading and participating in a number of national programs, including the National Natural Science Foundation of China program, which was recognized as “Excellent”. Her research achievements have been published in top international and domestic academic journals including Organization Science, Strategic Management Journal, Journal of Management, Journal of Business Ethics, Management World, etc. One of her papers has been included in the book The Oxford Handbook of Corporate Governance published by the University of Oxford. She serves as a member of the editorial board of Asia Pacific Journal of Management, and as an anonymous reviewer for international academic journals such as Journal of World Business and Management and Organization Review. In addition, the teaching cases she led and participated in have won the “2018 China Business Administration International Best Case Award Nomination” and the “2021 National 100 Best Cases”.
The paper “Governance Mechanism and Its Role in the Process of Moving Village Towards Common Prosperity - A Dual Case Study”, co-authored by Professor Xu Fengzeng, PhD student Xi Wei, and Professor Xu Yuehua from the School of Management, has recently been published in Management World, No. 12, 2021, and has been selected as one of the Outstanding Papers of Management World in 2021. The paper selected two “National Rural Governance Demonstration Villages”, Zhonghaoyu Village in Boshan, Shandong Province, and Yuanjia Village in Liquan, Shaanxi Province, for a double case study, and analyzed how to realize rural revitalization and common prosperity through in-depth analyses of the two cases, as well as put forward corresponding policy recommendations.
Current Situation and Problems of Rural Governance in China
The major strategic orientation of promoting rural revitalization is to achieve high-quality rural development, adhere to the status of farmers as the mainstay of the villages, and promote the common prosperity of farmers. To achieve the goals of rural revitalization and common prosperity, the village faces not only the challenge of rural socio-economic development but also the challenge of rural governance. It is only on the basis of an improved level of rural governance that rural revitalization can be successfully promoted and common prosperity ultimately achieved.
In China’s villages, there are a variety of village governance mechanisms, including clan governance, villagers’ self-governance, government administrative governance, and elite governance. However, there are still many problems in many villages, such as weak economic foundations, hollowing out of villages, and the decline of existing social relations. With regard to these problems, the existing governance mechanisms are difficult to play an effective role: clan power interferes with the democratic governance of villages; government administrative governance is ineffective due to asymmetric information and high costs; and most of the village elites first to become rich have left the villages to settle in the cities, resulting in a lack of talents. The development of China’s villages has been influenced by traditional governance, and the advancement of industrialization and urbanization has injected some new factors into the village governance mechanism. At present, a variety of governance mechanisms coexist in China’s rural governance. The traditional clan logic has weakened but still plays an important role. The current approach to villagers’ self-governance has integrated clan logic and, to a certain extent, transcended it. With the administerization of village cadres, the role played by the logic of government administration has been strengthened. Several of these institutional logic are in turn implemented through village elites. What kind of governance mechanism can contribute to the realization of rural revitalization and common prosperity?
Governance Mechanism of Rural Common Prosperity from the Perspective of Institutional Logic
The study found that, first, in the two typical fields of Zhonghaoyu Village and Yuanjia Village, there are five institutional logic, namely, clan logic, state logic, party organization logic, market logic, and company logic, which trigger a series of governance action strategies. Clan logic is an internal force that has always existed widely in China’s closed rural society, and the formation of villages stems from kinship ties, which can be regarded as the original institutional logic of villages, while party organization logic, state logic, market logic, and company logic can be regarded as exotic logic. Differentiated institutional logic can provide resources for the transformation of rural governance, while conflicting institutional logic can bring certain challenges to rural governance. In the specific context of Chinese villages, the four foreign institutional logic have evolved to form different types of symbiotic relationships with the native clan logic, and there is a state of structural fragmentation, vertical and horizontal layered integration, or deep integration between multiple institutional logic.
Second, the governance process of villages in the process of moving towards common prosperity is also a process of mutual adaptation between foreign institutional logic and native clan logic. At the initial stage of entering villages, these foreign institutional logic are more or less uncomfortable, and their contribution to the development of villages is limited. However, under the leadership of the Party, rural elites and villagers continue to obtain feedback from the past development experience of villages, and reflect on and adjust the rural governance system to find appropriate solutions, so that the various institutional logic can ultimately coexist in villages in a more harmonious way, and effectively contribute to the overall revitalization of villages.
Third, the study also found the dynamism of rural governance subjects in the face of multiple institutional logic. After reflection and adjustment, rural elites have made the party organization and clan logic gradually realize deep integration and better lead rural governance. With the negative effects brought by the market logic, the rural elites have learned from their experience, made certain adjustments, and introduced the corporate logic by way of the joint-stock cooperative system. The state logic enables the villagers to better participate in it through primary-level democratic self-governance, safeguards the status of villagers as the main body of governance, breaks down the boundaries between the logic of multiple systems in the village, and promotes the intermingling and coexistence of multiple system logic.
Fourth, there are similar modes and paths of governance toward common prosperity in the two cases. Both villages adhere to the leadership of party organizations and primary-level democratic decision-making. Both villages have solved the problem of external diseconomies in the process of tourism development by means of shareholding system cooperation, realized the internalization of externality, and avoided vicious competition within the village by means of village business planning, realizing the coexistence of market logic and other logic, so that the villagers can share the benefits of industrial development. The corporatization of operation and the inclusion of foreign merchants have also attracted more people from outside the village to join, and the population scale and economic scale of the villages have been enlarged through industrial development. The two villages spread the influence of common prosperity through the export of management models and upstream purchasing of the industrial chain, developing the small villages into large villages.
To sum up, the governance of the two villages towards common prosperity has been summarized as a process of enhancing rural income, developing rural civilization and spreading its influence under party organization logic, state logic, market logic, company logic, and clan logic, with party leadership, primary-level democratic decision-making, village business planning and shareholding system cooperation as the important paths.
Policy Recommendations for Villages to Move towards Common Prosperity
The paper has important practical value for villages to move towards common prosperity through rural governance. It mainly includes the following four aspects. First, the study emphasizes the central and leading role of village party branches in rural industrial development and rural governance, indicating that the construction of village party organizations is essential for villages to move towards common prosperity. The construction of village party organizations involves handling the relationship between the party and villagers with the purpose of “serving the people”. Because the party organization as a vanguard has significant initiative, it can stimulate the villagers’ independent governance ability through “ideological work” for the “people”. The party organizations in Zhonghaoyu village and Yuanjia village have organized and served the villagers through the leadership of party members, which unites the villagers and implements the ideological guidelines.
Second, to achieve common prosperity, it is important to emphasize the development of compatibility between the logic of native systems and the logic of foreign systems, so as to form a pattern of rural governance in which multiple institutional logic coexist. Under the leadership of the party organization, villages can realize the deep integration of the logic of the party organization and the logic of the native village clans, and promote the harmonious coexistence of state logic, market logic, and company logic in the villages under the leadership of the pioneer force. By further improving the democratic decision-making mechanism at the primary level in villages, the contradiction between the state logic and the native village clan logic can be effectively resolved. Through locally adapted village industrial development planning, villages can avoid losing long-term competitiveness by chasing short-term interests, and continuously adjust their planning to the situation during the development process, thus helping to realize the prosperity of village industries. It also promotes the balanced distribution of interests of rural collective assets through shareholding cooperation, standardizes the management system of rural enterprises to attract more talent, and realizes the hierarchical integration of corporate logic and clan logic.
Third, villages must upgrade public services and strengthen ideological leadership and traditional culture to create a foundation for good governance. To realize the enhancement of farmers’ income and rural civilization, both cultural-ethical standards and material well-being standards must be paid attention to. Zhonghaoyu Village and Yuanjia Village have raised the level of villagers’ ideological awareness by opening evening schools for farmers, organizing training for villagers, preaching and educating on new industries, as well as special ideological education for party members. With all the villagers setting up companies and cooperatives to strengthen the village collective economy, the village free three meals to the canteen (Zhonghaoyu Village), which is a good solution to the problem of public services. Zhonghaoyu Village and Yuanjia Village have created a good village atmosphere through advanced culture (such as tourism culture and beautiful countryside) and traditional culture (such as filial piety), instilling the concepts of goodwill and common prosperity, making village rules and regulations through democratic decisions, and strictly enforcing the rules and regulations through the village committees. Under the above measures, the appearance of the two villages has been significantly improved, the villagers have harmonious neighborly relations, the village collectives and village companies support and restrain each other, and the word-of-mouth effect of the village tourism has been widely disseminated, providing a model for solving the social management problems of rural governance.
Fourth, elite governance is indispensable for the villages to move towards common prosperity, which also shows that rural revitalization cannot be achieved without talent revitalization. The development of villages should be tailored to the local conditions and define the path of its own development. Zhonghaoyu Village and Yuanjia Village have achieved industrial revitalization through the development of rural tourism. The sustainable development of the rural tourism industry cannot be separated from the support of talents, especially the support of young talents with higher education. Through the system design of salary incentives, promotion, and company equity awards, as well as the establishment of supporting facilities in the villages, more and more promising young people will be attracted to join the cause of common prosperity in the villages, thus realizing the talent revitalization.
Originally published in Management World, Issue 12, 2021
Links: http://www.mwm.net.cn/web/xq?leafid=955&docid=4016
