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Unification and Division: A Theory of Institutional Choices in Imperial China

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  • Zhou, Haiwen

Abstract

Ancient China experienced various rounds of division and unification. Unification was maintained through economic and political institutions such as low tax rates to reduce peasant rebellions and the division of authority among government officials to reduce usurpation of power. A ruler’s choice of institutions to maintain unification is studied in a theoretical model. Interactions among external threats, internal rebellions by peasants, and usurpation of power by government officials are established. A higher level of external threats induces the ruler to choose a higher level of autonomy for government officials and a higher tax rate. That is, equilibrium probability of internal rebellions increases endogenously with the level of external threats. When government officials are more likely to usurp power, the ruler will choose a higher tax rate, thus equilibrium probability of peasant rebellions increases. Interestingly, a higher level of state power could induce the ruler to choose a lower tax rate!

Suggested Citation

  • Zhou, Haiwen, 2023. "Unification and Division: A Theory of Institutional Choices in Imperial China," MPRA Paper 116363, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116363
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    References listed on IDEAS

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    1. Haiwen Zhou, 2021. "Culture, institutions, and long‐run performance," Pacific Economic Review, Wiley Blackwell, vol. 26(3), pages 372-391, August.
    2. Loren Brandt & Debin Ma & Thomas G. Rawski, 2014. "From Divergence to Convergence: Reevaluating the History behind China's Economic Boom," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 45-123, March.
    3. Haiwen Zhou, 2012. "Internal Rebellions and External Threats: A Model of Government Organizational Forms in Ancient China," Southern Economic Journal, John Wiley & Sons, vol. 78(4), pages 1120-1141, April.
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    Cited by:

    1. Zhou, Haiwen, 2024. "The Reforms of Shang Yang," MPRA Paper 121608, University Library of Munich, Germany.

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    More about this item

    Keywords

    Chinese history; institutional design; size of nations; political economy; division of power;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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