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Economic Causes and Cures of Social Instability in China

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  • John Knight

Abstract

China's leaders have often expressed concerns about social instability, viewed as a threat both to the political order and to continued rapid growth. Slower growth might, in turn, further undermine social stability. Using survey data, the present paper examines the economic determinants of social instability. Four main determinants are identified: past and expected growth of income, income inequality, economic insecurity and misgovernance. The paper then considers possible policies to reduce social instability, examining each of the determinants in turn.

Suggested Citation

  • John Knight, 2014. "Economic Causes and Cures of Social Instability in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(2), pages 5-21, March.
    • Handle: RePEc:bla:chinae:v:22:y:2014:i:2:p:5-21
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    File URL: http://hdl.handle.net/10.1111/j.1749-124X.2014.12059.x
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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. John Knight & Li Shi & Deng Quheng, 2009. "Education and the Poverty Trap in Rural China: Setting the Trap," Oxford Development Studies, Taylor & Francis Journals, vol. 37(4), pages 311-332.
    3. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
    4. Albert O. Hirschman & Michael Rothschild, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic DevelopmentWith A Mathematical Appendix," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(4), pages 544-566.
    5. Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
    6. 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.
    7. 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.
    8. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December.
    9. Huang, Bihong & Chen, Kang, 2012. "Are intergovernmental transfers in China equalizing?," China Economic Review, Elsevier, vol. 23(3), pages 534-551.
    10. Frijters, Paul & Liu, Amy Y.C. & Meng, Xin, 2012. "Are optimistic expectations keeping the Chinese happy?," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 159-171.
    11. John Knight, 2014. "Inequality in China: An Overview," The World Bank Research Observer, World Bank, vol. 29(1), pages 1-19.
    12. John Knight & Li Shi & Deng Quheng, 2010. "Education and the Poverty Trap in Rural China: Closing the Trap," Oxford Development Studies, Taylor & Francis Journals, vol. 38(1), pages 1-24.
    13. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    14. Knight, John, 2013. "The economic causes and consequences of social instability in China," China Economic Review, Elsevier, vol. 25(C), pages 17-26.
    15. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
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    Cited by:

    1. Qiu, Tongwei & Li, Yifei & Shi, Xinjie & Peng, Changyan & Luo, Biliang, 2024. "Alternative modes of governance: Clans and social instability in rural China," China Economic Review, Elsevier, vol. 84(C).

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