Political Institution and Long Run Economic Trajectory: Some Lessons from Two Millennia of Chinese Civilization
AbstractBased on a reconstruction of a weighted index of political unification and a time series of incidences of warfare for the past two millennia, this paper develops a narrative to show that the establishment and consolidation towards a single unitary monopoly of political power in China was an endogenous historical process. Drawing on new institutional economics, this article develops a historical narrative to demonstrate that monopoly rule, a long time-horizon and the large size of the empire could give rise to a path of low-taxation and dynastic stability co-evolving with the growth of a private sector under China’s imperial system. But the fundamental problems of incentive misalignment and information asymmetry within its centralized and hierarchical political structure also placed limits to institutional change necessary for modern economic growth.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8791.
Date of creation: Jan 2012
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Find related papers by JEL classification:
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- N4 - Economic History - - Government, War, Law, International Relations, and Regulation
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-28 (All new papers)
- NEP-HIS-2012-03-28 (Business, Economic & Financial History)
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