When State-Building Hinders Growth: The Legacy of China’s Confucian Bureaucracy

That is the title of a new paper by Daniel Mattingly:

Do countries with a long history of state-building fare better in the long run? Recent work has shown that earlier state-building may lead to higher levels of present-day growth. By contrast, I use a natural experiment to show that the regions of China with over a thousand years of sustained exposure to state-building are significantly poorer today. The mechanism of persistence, I argue, was the introduction of a civil service exam based on knowledge of Confucian classics, which strengthened the social prestige of the civil service and weakened the prestige of commerce. A thousand years later, the regions of China where the Confucian bureaucracy was first introduced have a more educated population and more Confucian temples, but lower levels of wealth. The paper contributes to an important debate on the Great Divergence, highlighting how political institutions interact with culture to cause long-run patterns of growth.

Via the excellent Kevin Lewis.

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Is the author comparing state-building a thousand years ago in China to state-building after the economic reform of 1978? How about comparing state-building in ancient Greece or Rome to state-building in contemporary Greece or Rome. Not the same, is it? How about comparing state-building in America in the 19th century with state-building in America today. Any difference?

I want the contrast with regions with no state building history.

Say, Africa. Has growth, development been very high in Africa over the same time thousands years period? The Americas?

FWIW, Hong Kong and Singapore have no history of state-building.

Both places were really sleepy and poor until commerce became an idea there.

The real question is, how strongly do ideas of civil service and state-building push out ideas on commerce and market-building?

I would guess that the civil service selection criteria and incentive structure matters a lot. That might suggest the Chinese historically have done a poor job selecting or incentivizing civil servants for good governance.

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Good find. I wonder what was on those ancient imperial examinations besides the Classics and rhetoric. Certainly not math or economics, right?

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While this should fall under "duh", I am glad it can now fall under "Science!" also.

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Can we assume they controlled for foreign invasions in this study?

and how would they control for, say, enthusiasm for confucian temples waxing or waning?

Maybe in some places, the rich build Confucian temples while in other provinces they build churches or copies of the White House.

It might just be the least modern / Westernized areas are more traditional.

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Agree on this caveat. Not just “foreign” invasions by steppe peoples and Europeans, but every regime change including “native” Han nationality ones (Yuan to Ming, three kingdoms to Jin, Song unification of the five dynasties/ten kingdoms etc.) gives the new ruling dynasty incentive to pick developmental winners and losers, to reward early joiner provinces to the eventually winning coalition and punish holdouts.

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So, the fact that when nations try to professionalize their management by implementing qualification exams, and those exams are sometimes captured by management fads and elite-erected barriers... THAT's the controlling variable to denounce the success of "state building"?

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so the civil service exam was based mostly on confucius
but the civil service job was based mostly not on confucius

There was also widespread bribery of the exam officials. I forget who, but one famous Chinese scholar was poor his life until he was made an exam official. Yay...meritocracy?

Intense pressure to succeed meant that cheating and corruption were rampant, often outrunning strenuous attempts to prevent or defeat them. The Ming-dynasty Book of Swindles (c. 1617) contains an entire section of stories about "Corruption in Education", most of which involve swindlers exploiting exam-takers' desperate attempts to bribe the examiner.[57] In order to discourage favoritism which might occur if an examiner recognized a student's calligraphy, each exam was recopied by an official copyist. Exact quotes from the classics were required; misquoting even one character or writing it in the wrong form meant failure, so candidates went to great lengths to bring hidden copies of these texts with them, sometimes written on their underwear.[58] The Minneapolis Institute of Arts holds an example of a Qing dynasty cheat sheet, a handkerchief with 10,000 characters of Confucian classics in microscopically small handwriting.

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This has a Dune or Foundation feel to it.

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How much do the temples and educated populace count in the tally of wealth?

Note that many temples were destroyed during the cultural revolution, so how does he handle that?

Also, what if an area was rich in the past because agriculture was king, but now trade is king, so coastal areas are wealthier?

I wonder where we categorize opium imports

We don’t. It was much later.

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Good article. Ancient Chinese big government didn't just privilege government over commercial matters, but also inculcated a sense of cultural supremacy. Thus, ancient Chinese leaders thought that their culture was superior to all others, that other countries were only able to copy them, that they didn't need to explore across the sea or import goods from foreigners, etc. Thus, China failed to adopt superior foreign ideas and technologies and was utterly subjugated by those supposedly inferior foreign countries. And the most advanced parts of China today are non-Mandarin speaking coastal areas like Canton and Shanghai that were most exposed to foreign influence and trade.

Ironically, I see this kind of cultural arrogance a lot more in the United States than in China today. In the long run, insisting that our culture is simultaneously superior to foreign cultures and in need of government protection against those supposedly inferior cultures will be as big of a disaster for America as it was for China.

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Yet Washington DC is richer than ever. The richest zip codes in America are its suburbs. The Swamp has gotten bigger and badder than ever.

Thats because crony capitalism and corporate welfare has become the official religion

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Rice U. historian Martin Weiner's 1981 book "English Culture and the Decline of the Industrial Spirit, 1850-1980" drew an analogy between how Chinese meritocracy for prestigious government jobs sapped the commercial animal spirits in China and how the openness of the upper classes in England encouraged hard-charging industrialists to educate their sons to be toffish drones. Was it Chesterton who said that Eton was a school for the sons of fathers of gentlemen?

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Read more Julian Simon.

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Confucian governance probably did let effectiveness in China, actually by limiting state building and saddling the country with an outdated agrarian gentry (which is the real problem; rentier landlord gentry, not the prestige of government and respect for the government).

But I'm somewhat skeptical of their methodology. Seems like it would be plagued by anthropic bias - you find many old temples in places which were economically strong, but have undergone simple mean reversion to lower economic status. (No one is number one forever).

You'll find similar things with a narrow sample comparing Greece or Italy to the United States, but again probably simple mean reversion.

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