Autocratic Rule and Social Capital: Evidence from Imperial China
54 Pages Posted: 21 Oct 2016 Last revised: 9 Jan 2018
Date Written: January 8, 2018
This paper explores the impact of autocratic rule on social capital. Political repression is a distinguishing characteristic of autocratic regimes. Between 1660--1788, individuals in imperial China were persecuted if they were suspected of holding subversive attitudes towards the state. A difference-in-differences approach suggests that in an average prefecture, exposure to those literary inquisitions led to a decline of 38% in local charities---a key proxy of social capital---in subsequent decades. Consistent with the historical panel results, we find that in affected prefectures, individuals have lower levels of generalized trust in modern China. Taking advantage of institutional variation in 20th c. China, and two instrumental variables, we provide further evidence that political repression permanently reduced social capital: the Qing persecutions led to the under provision of basic education in a decentralized schooling system, long after the collapse of the Qing regime. Furthermore, we find that individuals in prefectures with a legacy of literary inquisitions are less interested in communal affairs and are more politically apathetic. These results indicate a potential vicious cycle in which autocratic rule becomes self-reinforcing through causing a permanent decline in social capital.
Keywords: Social Capital, Institutions, Autocratic Rule, Political Repression, China
JEL Classification: N45, K42, I2
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