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The Economic Causes and Consequences of Social Instability in China

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  • John Knight

Abstract

Social instability is a concept that economists rarely analyse, and yet it can lurk behind much economic policy-making.� China’s leadership has often publicly expressed its concerns to avoid ‘social instability’.� It is viewed as a threat both to the political order and to the continued rapid growth of the economy.� This threat to growth in turn endangers the maintenance of social stability.� This paper examines the likely economic determinants of social instability, using both surveys and other evidence.� After explaining the determinants of China’s rapid growth, the paper goes on to examine the likely mechanisms by which social instability can affect the growth rate.� There is a case for more research on the role of social instability in the economic development process.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 619.

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Date of creation: 03 Sep 2012
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Handle: RePEc:oxf:wpaper:619

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Keywords: China; Civil unrest; Corruption; Developmental state; Economic growth; Governance; Happiness; Inequality; Social instability;

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References

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  1. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, Elsevier, vol. 40(6), pages 1203-1228, June.
  2. Ari Aisen & Francisco José Veiga, 2010. "How does political instability affect economic growth?," Working Papers Central Bank of Chile, Central Bank of Chile 568, Central Bank of Chile.
  3. William Easterly & Jozef Ritzan & Michael Woolcock, 2006. "Social Cohesion, Institutions, and Growth," Working Papers, Center for Global Development 94, Center for Global Development.
  4. Collier, Paul & Hoeffler, Anke, 2000. "Greed and grievance in civil war," Policy Research Working Paper Series 2355, The World Bank.
  5. John Knight & Ramani Gunatilaka, 2011. "Does Economic Growth Raise Happiness in China?," Oxford Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 39(1), pages 1-24.
  6. John Knight & Linda Yueh, 2008. "The role of social capital in the labour market in China," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 16(3), pages 389-414, 07.
  7. Campos, Nauro F, 2000. "Who is Afraid of Political Instability?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2555, C.E.P.R. Discussion Papers.
  8. John Knight & Ramani Gunatilaka, 2007. "Great Expectations? The Subjective Well-Being of Rural-Urban Migrants in China," Economics Series Working Papers 322, University of Oxford, Department of Economics.
  9. Paul Frijters & Amy Y.C. Liu & Xin Meng, 2008. "Are optimistic expectations keeping the Chinese happy?," NCER Working Paper Series, National Centre for Econometric Research 37, National Centre for Econometric Research.
  10. Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  11. Knight, John & Deng, Quheng & Li, Shi, 2011. "The puzzle of migrant labour shortage and rural labour surplus in China," China Economic Review, Elsevier, Elsevier, vol. 22(4), pages 585-600.
  12. Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, Springer, vol. 1(2), pages 149-87, June.
  13. John Knight & Li Shi & Deng Quheng, 2010. "Son Preference and Household Income in Rural China," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 46(10), pages 1786-1805.
  14. Alesina, Alberto, et al, 1996. " Political Instability and Economic Growth," Journal of Economic Growth, Springer, Springer, vol. 1(2), pages 189-211, June.
  15. Song, Lina & Appleton, Simon, 2008. "Life Satisfaction in Urban China: Components and Determinants," IZA Discussion Papers 3443, Institute for the Study of Labor (IZA).
  16. Easterlin, Richard A. & Morgan, Robson & Switek, Malgorzata & Wang, Fei, 2013. "China's Life Satisfaction, 1990-2010," IZA Discussion Papers 7196, Institute for the Study of Labor (IZA).
  17. John Knight & Ramani Gunatilaka, 2009. "Income, Aspirations and the Hedonic Treadmill in a Poor Society," Economics Series Working Papers 468, University of Oxford, Department of Economics.
  18. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 681-712, August.
  19. Shang-Jin Wei & Xiaobo Zhang, 2011. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 119(3), pages 511 - 564.
  20. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  21. Knight, John & Ding, Sai, 2012. "China's Remarkable Economic Growth," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199698691, October.
  22. Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996. "Political Instability and Economic Growth," Scholarly Articles 4553024, Harvard University Department of Economics.
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Cited by:
  1. Bartolini, Stefano & Sarracino, Francesco, 2014. "The dark side of Chinese growth: Explaining decreasing well-being in times of economic boom," MPRA Paper 57765, University Library of Munich, Germany.

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