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

Zhou, Haiwen (2023): Unification and Division: A Theory of Institutional Choices in Imperial China.

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!

• Item Type: MPRA Paper
• Language: English
• Keywords: Chinese history, institutional design, size of nations, political economy, division of power
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H56 - National Security and War; N - Economic History > N4 - Government, War, Law, International Relations, and Regulation > N45 - Asia including Middle East; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East

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