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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.

Suggested Citation

  • John Knight, 2012. "The Economic Causes and Consequences of Social Instability in China," Economics Series Working Papers 619, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:619
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    File URL: http://www.economics.ox.ac.uk/materials/papers/12212/paper619.pdf
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    References listed on IDEAS

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    1. William Easterly & Jozef Ritzen & Michael Woolcock, 2006. "Social Cohesion, Institutions, And Growth," Economics and Politics, Wiley Blackwell, vol. 18(2), pages 103-120, July.
    2. 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, vol. 119(3), pages 511-564.
    3. John Knight & Li Shi & Deng Quheng, 2010. "Son Preference and Household Income in Rural China," Journal of Development Studies, Taylor & Francis Journals, vol. 46(10), pages 1786-1805.
    4. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
    5. Campos, Nauro F. & Nugent, Jeffrey B., 2002. "Who is afraid of political instability?," Journal of Development Economics, Elsevier, pages 157-172.
    6. Knight, John & Ding, Sai, 2012. "China's Remarkable Economic Growth," OUP Catalogue, Oxford University Press, number 9780199698691.
    7. 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, vol. 16(3), pages 389-414, July.
    8. Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
    9. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, pages 151-167.
    10. Knight, John & Deng, Quheng & Li, Shi, 2011. "The puzzle of migrant labour shortage and rural labour surplus in China," China Economic Review, Elsevier, vol. 22(4), pages 585-600.
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    12. Campos, Nauro F. & Nugent, Jeffrey B., 2002. "Who is afraid of political instability?," Journal of Development Economics, Elsevier, pages 157-172.
    13. Knight, John & Gunatilaka, Ramani, 2012. "Income, aspirations and the Hedonic Treadmill in a poor society," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 67-81.
    14. Perotti, Roberto, 1996. "Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-187, June.
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    17. 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).
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    19. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, pages 11-46.
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    21. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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    23. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
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    Citations

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    Cited by:

    1. Bartolini, Stefano & Sarracino, Francesco, 2015. "The Dark Side of Chinese Growth: Declining Social Capital and Well-Being in Times of Economic Boom," World Development, Elsevier, vol. 74(C), pages 333-351.
    2. repec:bla:buecrs:v:68:y:2016:i:s1:p:146-170 is not listed on IDEAS
    3. 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.
    4. Stefano Bartolini, 2014. "Building sustainability through greater happiness," Department of Economics University of Siena 703, Department of Economics, University of Siena.
    5. Marco Gonzalez-Navarro & Climent Quintana-Domeque, 2016. "Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects," The Review of Economics and Statistics, MIT Press, pages 254-267.
    6. repec:spr:soinre:v:132:y:2017:i:1:d:10.1007_s11205-015-1214-0 is not listed on IDEAS

    More about this item

    Keywords

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

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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