Making sense of institutional change in China: The cultural dimension of economic growth and modernization

Carsten Herrmann-Pillath

No 181, Frankfurt School - Working Paper Series from Frankfurt School of Finance and Management

Abstract: Building on a new model of institutions proposed by Aoki and the systemic approach to economic civilizations outlined by Kuran, this paper attempts an analysis of the cultural foundations of recent Chinese economic development. I argue that the cultural impact needs to be conceived as a creative process that involves linguistic entities and other public social items in order to provide integrative meaning to economic interactions and identities to different agents involved. I focus on three phenomena that stand at the center of economic culture in China, networks, localism and modernism. I eschew the standard dualism of individualism vs. collectivism in favour of a more detailed view on the self in social relationships. The Chinese pattern of social relations, guanxi, is also a constituent of localism, i.e. a peculiar arrangement and resulting dynamics of central-local interactions in governing the economy. Localism is balanced by culturalist controls of the center, which in contemporary China builds on the worldview of modernism. Thus, economic modernization is a cultural phenomenon on its own sake. I summarize these interactions in a process analysis based on Aoki's framework.

Keywords: Aoki; culture and the economy; emics/etics; guanxi; relational collectivism; central/local government relations; culturalism; population quality; consumerism (search for similar items in EconPapers)
JEL-codes: B52 P2 Z1 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cul, nep-hme, nep-soc and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Chapter: Making Sense of Institutional Change in China: The Cultural Dimension of Economic Growth and Modernization (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fsfmwp:181

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