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Does east love guanxi more than west? The evolution of relation-based governance: Contemporary and historical evidences

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  • Shaomin Li

Abstract

Relations, or informal social networks (also known as guanxi), are believed to be used predominantly by people in Asia to govern business transactions. Do Asians love relations more than their counterparts in the West? Using the theory of relation-based and rule-based governances, this paper argues that relying on relations in the East should not be viewed as predominantly determined by culture. The historical and contemporary evidences show that relation-based governance existed in the West before an impartial legal system was established. In conclusion, the paper argues that the East does not love guanxi more than the West; it only reflects a different stage of political and economic development.

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  • Shaomin Li, 2002. "Does east love guanxi more than west? The evolution of relation-based governance: Contemporary and historical evidences," Global Economic Review, Taylor & Francis Journals, vol. 31(1), pages 1-11.
    • Handle: RePEc:taf:glecrv:v:31:y:2002:i:1:p:1-11
    DOI: 10.1080/12265080208422884
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    References listed on IDEAS

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    1. Raghuram G. Rajan & Luigi Zingales, 1998. "Which Capitalism? Lessons Form The East Asian Crisis," Journal of Applied Corporate Finance, Morgan Stanley, vol. 11(3), pages 40-48, September.
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    Cited by:

    1. Zhong Qin & Wenli Cheng, 2012. "Evolving Ownership Structures in Private Enterprises in China: the Case of Ningbo," Monash Economics Working Papers 12-13, Monash University, Department of Economics.
    2. Qin, Zhong, 2011. "Models of trust-sharing in Chinese private enterprises," Economic Modelling, Elsevier, vol. 28(3), pages 1017-1029, May.

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