Buddha's grace illuminates all: Temple destruction, school construction and modernization in 20th century China

This paper studies how modern human capital emerged in early 20th century China. We document a novel historical episode known as the ‘Temple Destruction Movement’ (TDM), in which Chinese local governments appropriated huge amounts of Buddhist and Taoist temple assets to support the modernization of local schooling. We find that before the TDM, the initial stock of temple assets was uncorrelated with the levels and trends of human capital development; after the TDM was intensified, regions with higher initial stocks of temple assets suddenly constructed more modern schools, enrolled more students in modern educational programmes, and produced more modern elites. A back of the envelope calculation suggests that the TDM could account for nearly 70% of China's modern school construction in the early 20th century, which is consistent with historical records collected from numerous county gazetteers. Further analysis shows that the TDM was most effective in the presence of both a strong government and a powerful civil society, as the former made it easier to appropriate assets from the religious sector, while the latter helped to prevent the confiscated religious assets from being captured by local officials.