Give Us a Little Social Credit: To Design or to Discover Personal Ratings in the Era of Big Data

39 Pages Posted: 6 Dec 2018 Last revised: 9 Sep 2019

See all articles by Abigail Devereaux

Abigail Devereaux

Wichita State University, Department of Economics

Linan Peng

Texas Tech University

Date Written: November 18, 2018

Abstract

In 2014, the State Council of the Chinese Communist Party announced the institution of a social credit system by 2020, a follow-up to a similar statement on the creation of a social credit system issued by the State Council in 2007. Social credit ratings of the type being developed by the State Council in partnership with Chinese companies go beyond existing financial credit ratings in an attempt to project less-tangible personal characteristics like trustworthiness, criminal tendencies, and group loyalty onto a single scale. The emergence of personal credit ratings is enabled by Big Data, automated decision-making processes, machine learning and facial recognition technology. It is quite likely that various kinds of personal and social credit ratings shall become reality in the near future. We explore China’s version of its social credit system so far, compare the welfare and epistemological qualities of an ecology of personal ratings emanating from polycentric sources versus a social credit rating, and discuss whether a social credit system in an ideologically driven state is less a tool to maximize social welfare through trustworthiness provision and more a method of preventing and punishing deviance from a set of party-held ideological values.

Keywords: social credit, personal ratings, big data, trustworthiness, public goods, institutions

JEL Classification: D02, E02, O33, O35, P21, P50

Suggested Citation

Devereaux, Abigail and Peng, Linan, Give Us a Little Social Credit: To Design or to Discover Personal Ratings in the Era of Big Data (November 18, 2018). GMU Working Paper in Economics No. 18-35, Available at SSRN: https://ssrn.com/abstract=3286666 or http://dx.doi.org/10.2139/ssrn.3286666

Abigail Devereaux (Contact Author)

Wichita State University, Department of Economics ( email )

1845 Fairmount St
Wichita, KS 67260
United States

HOME PAGE: http://abigaildevereaux.com

Linan Peng

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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