Unified China; Divided Europe

Ko, Chiu Yu and Koyama, Mark and Sng, Tuan-Hwee (2014): Unified China; Divided Europe.

Abstract

This paper studies the causes and consequences of political centralization and fragmentation in China and Europe. We argue that the severe and unidirectional threat of external invasion fostered political centralization in China while Europe faced a wider variety of smaller external threats and remained politically fragmented. We test our hypothesis using data on the frequency of nomadic attacks and the number of regimes in China. Our model allows us to explore the economic consequences of political centralization and fragmentation. Political centralization in China led to lower taxation and hence faster population growth during peacetime than in Europe. But it also meant that China was relatively fragile in the event of an external invasion. Our results are consistent with historical evidence of warfare, capital city location, tax levels, and population growth in both China and Europe.

• Item Type: MPRA Paper
• Language: English
• Keywords: China; Europe; Great Divergence; Political Fragmentation; Political Centralization
• Subjects: H - Public Economics > H0 - General; H - Public Economics > H1 - Structure and Scope of Government; H - Public Economics > H5 - National Government Expenditures and Related Policies > H56 - National Security and War; N - Economic History > N0 - General; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N13 - Europe: Pre-1913; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N15 - Asia including Middle East; N - Economic History > N4 - Government, War, Law, International Relations, and Regulation > N40 - General, International, or Comparative; N - Economic History > N4 - Government, War, Law, International Relations, and Regulation > N43 - Europe: Pre-1913; N - Economic History > N4 - Government, War, Law, International Relations, and Regulation > N45 - Asia including Middle East

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