Rock, scissors, paper: the problem of incentives and information in traditional Chinese state and the origin of Great Divergence
Economic History Working Papers from London School of Economics and Political Science, Department of Economic History
This article posits that the political institution of imperial China – its unitary and centralized ruling structure – is an essential determinant to China‘s long-run economic trajectory and its early modern divergence from Western Europe. Drawing on institutional economics, I demonstrate that monopoly rule, a long time-horizon and the large size of the empire could give rise to a path of low-taxation and dynastic stability in imperial China. But fundamental incentive misalignment and information asymmetry problems within its centralized and hierarchical political structure also constrained the development the fiscal and financial capacity of the Chinese state. Based on a reconstruction of two millennia records of incidences of warfare, this paper develops a narrative to show that the establishment and consolidation towards a single unitary monopoly of political power was an endogenous historical process. Using data series on warfare and government revenue for 17-19th century, I illustrate the Qing imperial rule as an epitome of the traditional Chinese political economy.
JEL-codes: N95 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-his, nep-hme and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (8) Track citations by RSS feed
Downloads: (external link)
http://eprints.lse.ac.uk/37569/ Open access version. (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ehl:wpaper:37569
Access Statistics for this paper
More papers in Economic History Working Papers from London School of Economics and Political Science, Department of Economic History LSE, Dept. of Economic History Houghton Street London, WC2A 2AE, U.K.. Contact information at EDIRC.
Series data maintained by LSERO Manager on behalf of EH Dept. ().