A Model of Institutional Complementarities in Ancient China

Pacific Economic Review

2023

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The mutual dependence between national integration and institution building is established in a formal model. It is shown that a decrease in transportation costs, but not necessarily an increase in population size, reduces the equilibrium number of states and the adoption of rule-based institutions. With endogenous transportation costs or endogenous population size, the unification process can feed on itself. The model is illustrated by the state of Qin's unification of China in 221 BC. During this process of national integration, transformations from relation-based governance to rule-based governance happened.

Section: Reforms and The Adoption Of Rule-based Institutions In Generalmentioning

confidence: 99%

Section: Reforms and The Adoption Of Rule-based Institutions In Generalmentioning

confidence: 99%

National integration and institution building

Pacific Economic Review

2023

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“…Geographical conditions helped the unification of China. The power of the central government in ancient China was helped by the adoption of the county system and the Imperial Examination System (Zhou, 2018). First, while feudalism gradually disappeared in Europe in the Middle Ages, China adopted the county system in the Qin Dynasty more than two thousand years ago, much earlier than Europe.…”

Section: Argentina In the Middle-income Trapmentioning

confidence: 99%

Will China Avoid the Middle-Income Trap?

2018

The Chinese Economy

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This paper employs a historical approach to address whether a country can avoid the middle-income trap. The development of the manufacturing sector and technological capacities are important for a country to avoid the middle-income trap. South Korea avoided the middleincome trap through developing the manufacturing sector. Argentina became a middle-income country by exporting agricultural goods and fell victim to the trap. The distribution of political power between state and society affect a country's capacity to develop technological capabilities. The concentration of power in the government in China is affected by historical factors. With the provision of equal opportunities to all citizens, China will avoid the middle-income trap with her building-up of technological and innovative capacities. The reasoning here can also be used to understand development experiences of other countries.

“…Shang Yang and Legalism have received quite divergent assessments in China's history (Li, 1977, Introduction). In the following Han dynasty, 3 The unification of China affected China's institutions and culture fundamentally (Zhou, 2018a). After unification, Qin Shihuang established a common language, measure, currency, and behavioral mode in China more than two thousand years ago.…”

Section: Introductionmentioning

confidence: 99%

“…3 3 The unification of China affected China's institutions and culture fundamentally (Zhou, 2018a). After unification, Qin Shihuang established a common language, measure, currency, and behavioral mode in China more than 2000 years ago. …”

mentioning

confidence: 99%

Culture, institutions, and long‐run performance

Pacific Economic Review

2020

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If institutions are essential for long-run performance, why don't developing countries adopt institutions in developed countries to become rich? In this dynamic model, culture affects a ruler's institutional choice, while culture itself evolves endogenously. Multiple stable steady states are possible, and even similar initial conditions can lead to dramatically different steady states. The state of Qin's unification of China in 221 BC is used to illustrate the model. In one steady state, consistent with what happened in the state of Qin, individuals value material incentives. Qin did not strictly practice the patriarchal clan system advocated by Confucianism. Qin adopted Legalist institutions under which government officials were chosen by merit, and Qin culture was further shaped by Legalism. In another steady state, consistent with what happened in states other than Qin, individuals value loyalty and family values. Those states chose not to adopt Legalist institutions comprehensively for fearing that inconsistencies between culture and institutions could lead to internal rebellions even though institutional reforms would increase their military power. Other cases of how the interdependence between culture and institutions affects performance are also discussed.