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The Economic Consequences of Political Hierarchy: Evidence from Regime Changes in China, AD1000-2000

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Listed:
  • Ying Bai
  • Ruixue Jia

Abstract

We argue that China, with its long history, a relatively stable political system, and multiple regime changes, provides us an opportunity to investigate the political economy of administrative hierarchy. Using prefecture-level panel data and exploiting regime changes during AD1000-2000, we find that gaining and losing importance in the political hierarchy led to the rise and decline of different prefectures (measured by population density and urbanization). Moreover, political hierarchy shapes regional development via both political and market channels (reflected by public employment and transportation networks). More broadly, our study serves as new evidence on how politics shapes economic geography and offers a context to understand changes in economic activity location in the long run.

Suggested Citation

  • Ying Bai & Ruixue Jia, 2020. "The Economic Consequences of Political Hierarchy: Evidence from Regime Changes in China, AD1000-2000," NBER Working Papers 26652, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26652
    Note: PE POL
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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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