Leviathan's Offer: State-Building with Elite Compensation in Early Medieval China

73 Pages Posted: 28 Jul 2021 Last revised: 14 Oct 2021

See all articles by Joy Chen

Joy Chen

Cheung Kong Graduate School of Business

Erik H. Wang

Australian National University (ANU) - Department of Political and Social Change

Xiaoming Zhang

The University of Hong Kong - The University of Hong Kong Faculty of Business and Economics, Students

Date Written: September 1, 2021

Abstract

How to soften resistance to state-building efforts by reform losers? This paper highlights the strategy of compensation via the bureaucracy, in which the ruler offers meaningful government offices in exchange for elites’ acceptance of state-building reforms. We empirically explore this strategy in the context of the Northern Wei Dynasty (386 - 534 AD), which pivotally contributed to the end of state weakness in early medieval China that initially resulted from entrenched landowning interests and fragile barbarian kingdoms. Our unique dataset combines geocoded family background and career histories of around 2,600 elites with information on medieval Chinese strongholds, which we use to infer state weakness. Leveraging a comprehensive state-building package in the late 5th century, difference-in-differences estimates document that the reform led to a sustained, substantial increase in the total number of powerful aristocrats from localities with strongholds recruited into the imperial bureaucracy. Subsequent estimates provide evidence for two mechanisms by which compensation facilitates state-building: 1) the offices taken by these elites came with direct benefits of prestige and power, and 2) by transforming these aristocrats from local powerfuls into national stakeholders, these offices potentially induced the realignment of their interests toward those of the dynasty. Further analysis suggests that the bureaucracy provided the regime with institutional tools of power-sharing to mitigate credible commitment problems. Findings in this paper shed light on the causes of the "First Great Divergence," where similar barbarian invasions at similar times led to political fragmentation in Europe but further state consolidation in China.

Keywords: Political economy, Institutions, State-building, Indirect Rule, Bureaucracy, China, Medieval History

JEL Classification: D73, H70, N45, O1

Suggested Citation

Chen, Joy and Wang, Erik H. and Zhang, Xiaoming, Leviathan's Offer: State-Building with Elite Compensation in Early Medieval China (September 1, 2021). Available at SSRN: https://ssrn.com/abstract=3893130 or http://dx.doi.org/10.2139/ssrn.3893130

Joy Chen

Cheung Kong Graduate School of Business ( email )

Oriental Plaza, Tower E3
One East Chang An Avenue
Beijing, 100738
China

Erik H. Wang (Contact Author)

Australian National University (ANU) - Department of Political and Social Change ( email )

Hedley Bull Building
130 Garran Road
ACTON, ACT ACT 2601
Australia

Xiaoming Zhang

The University of Hong Kong - The University of Hong Kong Faculty of Business and Economics, Students ( email )

Hong Kong
China

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