IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v163y2023ics0304387823000305.html
   My bibliography  Save this article

Circle of fortune: The long-term impact of Western customs institution in China

Author

Listed:
  • Jin, Gan

Abstract

This paper examines the long-run effect of the customs institution founded by the Chinese Maritime Customs (CMC), a foreign-run customs agency established in the mid-19th century in China. A historical natural experiment is exploited to identify a causal effect: in 1902, the CMC took over a number of Chinese Native Customs stations, for which it established clear procedural guidelines and improved transparency and efficiency, while the other Native Customs stations remained under Chinese authority. Using the historical criterion that determined which Native Customs stations were taken over – those located within a 25 km radius of a CMC customs station – as a source of exogenous variation in the quality of the local customs institution, I show that counties historically affected by the CMC institution are more developed today relative to nearby but unaffected areas. Moreover, today’s business and bureaucracy in the affected counties suffer less from corruption, suggesting that the long-run effect of institutions can be explained by the cultural norms it fostered in the local society.

Suggested Citation

  • Jin, Gan, 2023. "Circle of fortune: The long-term impact of Western customs institution in China," Journal of Development Economics, Elsevier, vol. 163(C).
    • Handle: RePEc:eee:deveco:v:163:y:2023:i:c:s0304387823000305
    DOI: 10.1016/j.jdeveco.2023.103075
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387823000305
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2023.103075?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ruixue Jia, 2014. "Weather Shocks, Sweet Potatoes and Peasant Revolts in Historical China," Economic Journal, Royal Economic Society, vol. 124(575), pages 92-118, March.
    2. repec:spo:wpmain:info:hdl:2441/10262 is not listed on IDEAS
    3. Xu, Gang & Yano, Go, 2017. "How does anti-corruption affect corporate innovation? Evidence from recent anti-corruption efforts in China," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 498-519.
    4. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    5. Yvonne Jie Chen & Zhiwu Chen & Shijun He, 2019. "Social Norms and Household Savings Rates in China," Review of Finance, European Finance Association, vol. 23(5), pages 961-991.
    6. Nico Voigtländer & Hans-Joachim Voth, 2012. "Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1339-1392.
    7. Nathan Nunn, 2012. "Culture and the Historical Process," Economic History of Developing Regions, Taylor & Francis Journals, vol. 27(S1), pages 108-126.
    8. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    9. Felipe Valencia Caicedo, 2019. "The Mission: Human Capital Transmission, Economic Persistence, and Culture in South America," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 507-556.
    10. Barr, Abigail & Serra, Danila, 2010. "Corruption and culture: An experimental analysis," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 862-869, December.
    11. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January.
    12. Shuo Chen & James Kung, 2016. "Of maize and men: the effect of a New World crop on population and economic growth in China," Journal of Economic Growth, Springer, vol. 21(1), pages 71-99, March.
    13. Elise Huillery, 2009. "History Matters: The Long-Term Impact of Colonial Public Investments in French West Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 176-215, April.
    14. Poncet, Sandra & Steingress, Walter & Vandenbussche, Hylke, 2010. "Financial constraints in China: Firm-level evidence," China Economic Review, Elsevier, vol. 21(3), pages 411-422, September.
    15. Ma, Debin, 2008. "Economic Growth in the Lower Yangzi Region of China in 1911–1937: A Quantitative and Historical Analysis," The Journal of Economic History, Cambridge University Press, vol. 68(2), pages 355-392, June.
    16. Jiang, Ting & Nie, Huihua, 2014. "The stained China miracle: Corruption, regulation, and firm performance," Economics Letters, Elsevier, vol. 123(3), pages 366-369.
    17. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    18. repec:hal:spmain:info:hdl:2441/10262 is not listed on IDEAS
    19. Kong, Dongmin & Tao, Yunqing & Wang, Yanan, 2020. "China's anti-corruption campaign and firm productivity: Evidence from a quasi-natural experiment," China Economic Review, Elsevier, vol. 63(C).
    20. Nathan Nunn & Diego Puga, 2012. "Ruggedness: The Blessing of Bad Geography in Africa," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 20-36, February.
    21. Sara Lowes & Eduardo Montero, 2021. "Concessions, Violence, and Indirect Rule: Evidence from the Congo Free State," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2047-2091.
    22. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    23. Melissa Dell & Nathan Lane & Pablo Querubin, 2018. "The Historical State, Local Collective Action, and Economic Development in Vietnam," Econometrica, Econometric Society, vol. 86(6), pages 2083-2121, November.
    24. Long, Cheryl & Murrell, Peter & Yang, Li, 2019. "Memories of colonial law: The inheritance of human capital and the location of joint ventures in early-reform China," China Economic Review, Elsevier, vol. 58(C).
    25. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 703-745.
    26. Xu,L. Colin & Yang,Li, 2018. "Stationary Bandits, State Capacity, and the Malthusian Transition : The Lasting Impact of the Taiping Rebellion," Policy Research Working Paper Series 8620, The World Bank.
    27. Sascha O. Becker & Katrin Boeckh & Christa Hainz & Ludger Woessmann, 2016. "The Empire Is Dead, Long Live the Empire! Long‐Run Persistence of Trust and Corruption in the Bureaucracy," Economic Journal, Royal Economic Society, vol. 126(590), pages 40-74, February.
    28. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2016. "Long-Term Persistence," Journal of the European Economic Association, European Economic Association, vol. 14(6), pages 1401-1436, December.
    29. Elise Huillery, 2009. "History Matters: The Long Term Impact of Colonial Public Investments in French West Africa," SciencePo Working papers hal-01052798, HAL.
    30. Kelly, Morgan, 2019. "The Standard Errors of Persistence," CEPR Discussion Papers 13783, C.E.P.R. Discussion Papers.
    31. Kung, James Kai-sing & Ma, Chicheng, 2014. "Can cultural norms reduce conflicts? Confucianism and peasant rebellions in Qing China," Journal of Development Economics, Elsevier, vol. 111(C), pages 132-149.
    32. Okoye, Dozie, 2021. "Things fall apart? Missions, institutions, and interpersonal trust," Journal of Development Economics, Elsevier, vol. 148(C).
    33. Luis Angeles & Kyriakos C. Neanidis, 2015. "The Persistent Effect of Colonialism on Corruption," Economica, London School of Economics and Political Science, vol. 82(326), pages 319-349, April.
    34. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    35. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
    36. Raymond Fisman & Edward Miguel, 2007. "Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1020-1048, December.
    37. Alvarez-Villa, Daphne & Guardado, Jenny, 2020. "The long-run influence of institutions governing trade: Evidence from smuggling ports in colonial Mexico," Journal of Development Economics, Elsevier, vol. 144(C).
    38. Ying Bai & James Kai-sing Kung, 2015. "Diffusing Knowledge While Spreading God'S Message: Protestantism And Economic Prosperity In China, 1840–1920," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 669-698, August.
    39. Xingqiang Du, 2015. "Does Confucianism Reduce Minority Shareholder Expropriation? Evidence from China," Journal of Business Ethics, Springer, vol. 132(4), pages 661-716, December.
    40. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    41. Nathan Nunn & Leonard Wantchekon, 2011. "The Slave Trade and the Origins of Mistrust in Africa," American Economic Review, American Economic Association, vol. 101(7), pages 3221-3252, December.
    42. Gustavo J. Bobonis & Luis R. Cámara Fuertes & Rainer Schwabe, 2016. "Monitoring Corruptible Politicians," American Economic Review, American Economic Association, vol. 106(8), pages 2371-2405, August.
    43. Morgan Kelly, 2019. "The Standard Errors of Persistence," Working Papers 201913, School of Economics, University College Dublin.
    44. repec:hal:wpspec:info:hdl:2441/10262 is not listed on IDEAS
    45. Fabian Wahl, 2017. "Does European development have Roman roots? Evidence from the German Limes," Journal of Economic Growth, Springer, vol. 22(3), pages 313-349, September.
    46. Chen, Yuyu & Wang, Hui & Yan, Se, 2022. "The long-term effects of Protestant activities in China," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 394-414.
    47. Benjamin A. Olken, 2007. "Monitoring Corruption: Evidence from a Field Experiment in Indonesia," Journal of Political Economy, University of Chicago Press, vol. 115(2), pages 200-249.
    48. Waldinger, Maria, 2017. "The long-run effects of missionary orders in Mexico," LSE Research Online Documents on Economics 68841, London School of Economics and Political Science, LSE Library.
    49. Sara Lowes & Nathan Nunn & James A. Robinson & Jonathan L. Weigel, 2017. "The Evolution of Culture and Institutions: Evidence From the Kuba Kingdom," Econometrica, Econometric Society, vol. 85, pages 1065-1091, July.
    50. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 703-745.
    51. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
    52. repec:spo:wpecon:info:hdl:2441/10262 is not listed on IDEAS
    53. Waldinger, Maria, 2017. "The long-run effects of missionary orders in Mexico," Journal of Development Economics, Elsevier, vol. 127(C), pages 355-378.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gan Jin & Günther G. Schulze, 2024. "Historical Legacies and Urbanization: Evidence from Chinese Concessions," CESifo Working Paper Series 10976, CESifo.
    2. Gan Jin & Günther G. Schulze, 2024. "The Long-term Effect of Western Customs Institution on Firm Innovation in China," Discussion Paper Series 46 JEL Classification: N7, Department of International Economic Policy, University of Freiburg, revised Feb 2024.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leonardo M. Klüppel & Lamar Pierce & Jason A. Snyder, 2018. "Perspective—The Deep Historical Roots of Organization and Strategy: Traumatic Shocks, Culture, and Institutions," Organization Science, INFORMS, vol. 29(4), pages 702-721, August.
    2. Okoye, Dozie, 2021. "Things fall apart? Missions, institutions, and interpersonal trust," Journal of Development Economics, Elsevier, vol. 148(C).
    3. Gan Jin & Günther G. Schulze, 2024. "The Long-Term Effect of Western Customs Institution on Firm Innovation in China," CESifo Working Paper Series 10967, CESifo.
    4. Nunn, Nathan, 2014. "Historical Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 7, pages 347-402, Elsevier.
    5. Maseland, Robbert, 2021. "Contingent determinants," Journal of Development Economics, Elsevier, vol. 151(C).
    6. Remi Jedwab & Felix Meier zu Selhausen & Alexander Moradi, 2022. "The economics of missionary expansion: evidence from Africa and implications for development," Journal of Economic Growth, Springer, vol. 27(2), pages 149-192, June.
    7. Ben Salah, Mhamed & Chambru, Cédric & Fourati, Maleke, 2024. "The colonial legacy of education: Evidence from Tunisia," Journal of Comparative Economics, Elsevier, vol. 52(4), pages 773-792.
    8. Focacci, Chiara Natalie & Kovac, Mitja & Spruk, Rok, 2023. "Ethnolinguistic diversity, quality of local public institutions, and firm-level innovation," International Review of Law and Economics, Elsevier, vol. 75(C).
    9. Liu, Xianda & Hou, Wenxuan & Main, Brian G.M., 2022. "Anti-market sentiment and corporate social responsibility: Evidence from anti-Jewish pogroms," Journal of Corporate Finance, Elsevier, vol. 76(C).
    10. Annalisa Frigo & Èric Roca Fernández, 2022. "Roots of gender equality: the persistent effect of beguinages on attitudes toward women," Journal of Economic Growth, Springer, vol. 27(1), pages 91-148, March.
    11. Ho, Hoang-Anh & Martinsson, Peter & Olsson, Ola, 2017. "The Origins of Cultural Divergence: Evidence from a Developing Country," Working Papers in Economics 714, University of Gothenburg, Department of Economics, revised Jun 2018.
    12. Hoang-Anh Ho & Peter Martinsson & Ola Olsson, 2022. "The origins of cultural divergence: evidence from Vietnam," Journal of Economic Growth, Springer, vol. 27(1), pages 45-89, March.
    13. Fenske, James, 2015. "African polygamy: Past and present," Journal of Development Economics, Elsevier, vol. 117(C), pages 58-73.
    14. Bai, Yu & Arabadzhyan, Anastasia & Li, Yanjun, 2022. "The legacy of the Great Wall," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 120-147.
    15. Fuchs-Schündeln, N. & Hassan, T.A., 2016. "Natural Experiments in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 923-1012, Elsevier.
    16. Enrico Spolaore & Romain Wacziarg, 2013. "How Deep Are the Roots of Economic Development?," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 325-369, June.
    17. Fenske, James & Gupta, Bishnupriya & Mukhopadhyay, Anwesh, 2025. "Colonial Persistence," The Warwick Economics Research Paper Series (TWERPS) 1557, University of Warwick, Department of Economics.
    18. Jedwab, Remi & Meier zu Selhausen, Felix & Moradi, Alexander, 2021. "Christianization without economic development: Evidence from missions in Ghana," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 573-596.
    19. Papaioannou, Elias & Michalopoulos, Stelios, 2010. "Divide and Rule or the Rule of the Divided? Evidence from Africa," CEPR Discussion Papers 8088, C.E.P.R. Discussion Papers.
    20. Deng, Jiapin & Liu, Qiao & Yan, Se, 2025. "Fostering social capital: The long-term effects of Protestant activities on corporate tax avoidance in modern China," Journal of Economic Behavior & Organization, Elsevier, vol. 234(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Z10 - Other Special Topics - - Cultural Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:163:y:2023:i:c:s0304387823000305. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.