The Long Shadow of the Imperial Examination System and the Historical Root of ``Needham Puzzle'' and the Chinese Growth Miracle

Shi, Xiangyu (2024): The Long Shadow of the Imperial Examination System and the Historical Root of ``Needham Puzzle'' and the Chinese Growth Miracle.

Abstract

Why China was not the origin of the Industrial Revolution but rose from imperial dynasties and experienced a growth miracle in the past four decades? We find that its root is China's imperial examination system (keju), which explains the fall and rise of historical, modern, and contemporary China. Using three instrumental variable approaches, we find that keju significantly facilitates contemporary innovation and business creation, by raising the contemporaneous level of human capital, shaping an innovative and productive culture, and fostering efficient institutions. Keju had positive effects on the development of modern China before the People's Republic of China era, but its effects were most salient after the economic reform in 1978. In historical periods, keju diverted talents away from scientific/technological sectors, leading to sluggish development in the Ming and Qing dynasties.

• Item Type: MPRA Paper
• Language: English
• Keywords: imperial examination system, human capital, culture, institution, innovation, business creation, China
• Subjects: D - Microeconomics > D2 - Production and Organizations; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor; N - Economic History > N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development

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