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The economic causes and consequences of social instability in China
Abstract
This paper provides a survey of the economic literature relevant to social instability in China and moulds it into an argument. The objective is to offer a fresh view of economic policy and performance through the lens of the threat posed by social instability. This is a concept that economists rarely analyse, and yet it can lurk behind much economic policy-making. China's leadership has often publicly expressed its concern to avoid ‘social instability’. It is viewed as a threat both to the political order and to the continued rapid growth of the economy. This threat to growth in turn endangers the maintenance of social stability. The paper examines the likely economic determinants of social instability, using both surveys and other evidence. After discussing the determinants of China's rapid growth, the paper goes on to examine the likely mechanisms by which social instability can affect the growth rate. There is a case for more research on the role of social instability in the economic development process.
... From the reviewed literature, it is evident that economic factors cannot be entirely discounted in the debate on factors impacting political stability/instability as argued by Goldstone et al. (2010). The findings of Knight (2013) for the Chinese economy further supports the significant influence of macroeconomic variables or conditions on political stability; in this study, Knight (2013) concluded that factors such as future income growth, economic insecurity, economic inequality, and perception of corruption significantly shape the political atmosphere. ...
... From the reviewed literature, it is evident that economic factors cannot be entirely discounted in the debate on factors impacting political stability/instability as argued by Goldstone et al. (2010). The findings of Knight (2013) for the Chinese economy further supports the significant influence of macroeconomic variables or conditions on political stability; in this study, Knight (2013) concluded that factors such as future income growth, economic insecurity, economic inequality, and perception of corruption significantly shape the political atmosphere. ...
... To compute the price of these commodities in local currency for the respective countries, we sourced the local currency exchange to the US Dollar from the World Bank Development Indicators (WDI) database for the various countries. Also compiled from the WDI include the annual rate of inflation, GDP per capita growth, and FDI growth as controls for the various countries following research works such as Barugahara (2015), Khan and Saqib (2011), Knight (2013) and Kim (2010) that have found these variables to be influential in political stability/instability discourse. As controls, we also make reference to the literature to compile data on governance and institutional variables found to be significant in impacting political environment such as control of corruption, government effectiveness, and regulatory quality (refer to Kim 2010;Goldstone et al. 2010;Knight 2013) from the WGI of the World Bank. ...
The study examines the effect of fluctuations in prices of key internationally traded commodities, inflation, inflation uncertainty and macroeconomic uncertainty on political stability among emerging economies in Sub-Saharan Africa using panel data from 1996 to 2019. Empirical analysis examining the relationship in question is performed using pooled ordinary least squares with Driscoll and Kray (Rev Econ Stat 80(4):549-560, 1998) standard errors. Estimated results suggest that volatility in prices of crude oil, copper, and coal exert significant negative influence on political stability among economies in the sub-region. Further empirical estimates show that volatility in exchange rate denominated price of gold and natural gas on the international market have significant positive impact on political stability among economies in the sub-region. Our analysis additionally suggest that regulatory quality positively moderates the extent to which volatility in the price of copper ultimately impact political stability, but moderates negatively, the extent to which volatility in prices of gold and coal affect political stability among economies in the sub-region.
... Poverty makes it difficult for people to have access to good education and balanced diets. This is because those who are mostly affected lack the funds to access quality education, which further marginalizes them (Knight, 2013). When one does not access quality education, such a person is not able to gain the necessary skills needed for them to venture into the job market. ...
... Social instability, on the other hand, is not only a factor which leads to human insecurity; it is also a threat to economic growth and political order (Knight, 2013. Social instability is when social justice is not in place, thus leading to the increase in social problems, while limiting social progress (Knight, 2013). ...
... Social instability, on the other hand, is not only a factor which leads to human insecurity; it is also a threat to economic growth and political order (Knight, 2013. Social instability is when social justice is not in place, thus leading to the increase in social problems, while limiting social progress (Knight, 2013). Social instability can be caused by various factors, including: ...
Human security is an essential aspect of human rights, as it is necessary for every human to feel secured in their community, and country at large. However, human security is frequently threatened by conflict, especially in Africa. Adding to the different challenges that most African states face, conflict contributes immensely towards destabilizing human security. As such, this thesis addresses the destabilized human security situation in Nigeria, by examining the implication of the Boko Haram insurgency. The effects of the Boko Haram insurgency in Nigeria, ranges from political, economic, social, cultural, to environmental. These insecurities have led to the destabilisation of the country and its economy. Although human security is broad, this thesis focuses on the political and socio-economic implications of the Boko Haram insurgency. This includes, but not limited to, poverty and illiteracy, unemployment, poor healthcare service, displacement, national insecurity, and political instability. The thesis argues that the Nigerian government has been unable to defeat the insurgent group due to the increasing rate of corruption in the country, which in turn leads to lack of adequate human and material resources need to win the group.
In conducting this research, a literature-based methodology was employed, where secondary data, in the form of books, newspapers, online articles/journals, and reports, that have been written on the topic, were critically analysed to draw up adequate information on the activities of Boko Haram and it implications on the human security of the country.
... In this context, studies have shown that migrant workers are more likely to earn less, work longer hours (see Chan 2001;Lu and Song 2006;Wong et al. 2007), and be ill treated in the workplace compared to their native counterparts (Chan 2001;de Beijl 2000). Researchers have shown that Chinese migrant workers who face economic and social discrimination have much lower subjective well-being than other workers (see Knight and Gunatilaka 2010;Knight 2013). Other research has shown that co-workers who witness workplace bullying also experience increases in physical and emotional strain (Sims and Sun 2012). ...
... These studies complement the existing literature examining the subjective well-being of Chinese migrants Smyth et al. 2010;Cheng et al. 2015). Knight (2013) offers three reasons linking workplace bullying and subjective wellbeing. The first is that workplace bullying leads migrants to worry about their job security and this increases stress which lowers subjective well-being. ...
... This frustration lowers subjective well-being. This paper seeks to add to this growing literature of migrant worker welfare by looking at the quality of work life perceived by such workers in urban centers in China in light of these three reasons provided by Knight (2013). Why this emphasis? ...
A survey was conducted among 768 migrant workers working in urban cities in China finding out about their experiences over ten types of workplace bullying measures. This paper examines how the ex-ante choices of migrant workers in their choice of which region to work in, choice of how long to stay in their company, choice of level of education to receive, choice to transfer their hukou to the city of their workplace, and also their choice to be educated in the labor law, impact the intensity of workplace bullying experienced. Except for knowledge of the labor law, all other choices lessen workplace bullying in some of these dimensions but increases workplace bullying in others. For those with Junior High qualifications and above, the consistent result is that migrants who are more familiar with the labor law, are able to experience less workplace bullying across most of the ten domains.
... Concurrently, the primary precipitators of social instability are identified as misgovernance and insecurity (Knight, 2014). Expanding on this, Knight (2013) employed the number of mass incidents and social conflicts as proxies for social instability. Evidently, crimes and social disputes can be perceived as significant indicators of incivility, misgovernance and insecurity thereby acting as suitable proxies for social instability. ...
... Beyond crimes and disputes, mass incidents are also used to serve as an alternative indicator of social instability (Knight, 2013). This is because mass incidents can lead to significant social repercussions. ...
... Given the difficulty of examining social discontent more directly, it is worth approaching this issue through the study of happiness (Knight and Gunatilaka 2013;Knight 2014b). Microeconomic analysis suggests that unhappiness -and by implication social instability -is sensitive not only to economic inequality and expectations about future income growth, but also to perceptions of corruption and of procedural injustice. ...
... In the CHIP household survey of 2002, 21% of urban households reported corruption to be the most serious social problem; corruption came second after unemployment and layoff (Knight and Gunatilaka 2013). Since 2002, unemployment and layoff have fallen but corruption has risen. ...
China’s inequality is evolving. This paper brings the story up to date, drawing on recent research, much of it by the author. It begins with a brief account of rising inequality, and its causes, over the period of economic reform. It then examines the fall in the inequality of income in recent years and the reasons for this reversal of trend. Inequality of wealth, by contrast, has risen over the twenty-first century: its dimensions, components and causes are analysed. The final substantive section considers the evaluation of inequality in more depth and detail than is conventional, and provides pointers as to how value judgements about inequality might be made.
... In addition, it is also important to consider that income inequality can also cause social instability, curbing the incentives for entrepreneurship and innovation (Bahmani, Galindo & Méndez, 2010;Galindo, Méndez, & Alfaro, 2010;Knight, 2012;Shin, 2012); although, this effect will depend on the degree of inequality (Knight, 2012). In this sense, Knight, Song, and Gunatilaka (2009) state that when inequality has an effect beyond an individual's own group of reference, at either national or regional level or between urban and rural areas, it can be perceived as an opportunity to gain higher profits, which could imply an incentive for entrepreneurs and innovation processes to get on equal terms with the wealthy. ...
... In addition, it is also important to consider that income inequality can also cause social instability, curbing the incentives for entrepreneurship and innovation (Bahmani, Galindo & Méndez, 2010;Galindo, Méndez, & Alfaro, 2010;Knight, 2012;Shin, 2012); although, this effect will depend on the degree of inequality (Knight, 2012). In this sense, Knight, Song, and Gunatilaka (2009) state that when inequality has an effect beyond an individual's own group of reference, at either national or regional level or between urban and rural areas, it can be perceived as an opportunity to gain higher profits, which could imply an incentive for entrepreneurs and innovation processes to get on equal terms with the wealthy. ...
This paper aims to be a contribution to the analysis of the factors that encourages entrepreneurs to innovate inside their business. There are many elements that can condition the entrepreneurial innovation. However, in this paper we will devote our attention to studying the role of socioeconomic factors, such as social capital, institutions and income distribution. These elements that shape the environment in which businesses operate can act as important incentives for innovation or, conversely, may hinder the entrepreneurial behaviour of economic agents. To accomplish this goal, we estimate an econometric model for a sample of thirteen European countries for the period 2002-2010. The results obtained indeed confirm that this category of factors modify the innovative potential of societies.
... A striking increase in the suicide rate in urban areas was observed in 2005, with a similar peak among older adults in both urban and rural areas in 2010. The underlying mechanisms for these fluctuations are unclear, but may be due to the effect of the interaction between China's social and political status in recent years [35,36]. ...
... There is a correlation between income inequality and suicide rates [71]. Fourth, there is evidence that social unrest has been growing in China due to stagnant of sociopolitical reform [35], which may also increase the risk of suicide for some groups. Finally, urbanization, which is still a policy priority for the Chinese government, may increase the risk of suicide among those who are unemployed or who struggle to adjust to life in the city. ...
The aims of this study were: (1) to present the time trend of suicide rate among people aged 15 or above in China over the period 2002-2011 and (2) to examine the current profile of completed suicides during 2009-2011.
Data on suicide rate in 2002-2011 were provided by the Chinese Ministry of Health (MOH). The trends of region-, gender-, and age-specific suicide rates were examined using Poisson regression models. The mean number of completed suicides for each cohort during 2009-2011 was calculated and a mean national suicide rate was estimated.
The overall suicide rate decreased significantly over the past decade, but rates in young males and rural older adults did not reduce and in fact increased among older adults in both urban and rural areas towards the end of the study period. For 2009-2011, 44 % of all suicides occurred among those aged 65 or above and 79 % among rural residents. The estimated mean national suicide rate was 9.8 per 100,000 and was slightly higher for males than females.
The benefits of economic growth, such as higher employment and more educational opportunities for the rural population in particular, may have contributed to the reduced suicide rate in China. However, the recent rapid changes in socioeconomic conditions could have increased stress levels and resulted in more suicides, especially among the elderly. Despite the significant reduction reported here, the latest figures suggest the declining trend is reversing. It will be important to continue monitoring the situation and to examine how urbanization and economic changes affect the well-being of 1.3 billion Chinese.
... In recent years, financial fraudulent practices such as money laundering, investment scams, funds embezzlement and corruption culture are widely spread all over the world (Hooker, 2009;Mejri et al., 2022). Fraudsters commit fraud to fulfil their unlimited human wants, such as greediness, living beyond their means, large expenses, personal debt, family financial problems, drug addiction, and poor living standards (Knight, 2013). To detect and prevent these fraud practices, the country's financial institutions hire services of professional accountants and auditors and adopt forensic accounting procedures. ...
Detection and prevention of fraudulent practices is a challenging assignment in developed as well as in developing countries. The efforts become more crucial in government sector, as public trust on institutions, government officials and resources. Dishonest workers and employees try to cheat the official machinery for their personal benefits. Thus, purpose of this study is to find relationship between fraud incidents and the fraud triangle theory (FTT). A well-designed survey was conducted and data was analyzed using SEM, correlation analysis and demographic analysis. Results revealed significant relation between elements of FTT and fraud incidents leads to salary privileges revision
... These workers have been shown to earn less, work longer hours (Zhigang & Shunfeng, 2006;Wong et al., 2007), and are more frequently subjected to workplace mistreatment (Chan, 2016). Knight (2013) examined workplace bullying against migrant workers under three themes. To start, there are two factors that contribute to mistreatment: payment regimes and job security. ...
Purpose: The issue of migrant workers has been frequently addressed in organization studies, as in many other fields since migration has become a global phenomenon. In parallel, migrant entrepreneurship literature has emerged and asserts that their entrepreneurial motivations may differ from those described in mainstream entrepreneurship literature. The current study aims to understand to what extent the bullying behavior that migrant workers are exposed to in the workplace encourages them to engage in entrepreneurship. The study further investigates the moderating role of individual entrepreneurial orientation (IndEO) in the aforementioned relationship to provide a more holistic view.
Methodology: This study has a quantitative design. Using structured questionnaires, 231 migrant workers employed in the textile sector in Turkey participated for this study. The hypotheses were tested using the AMOS statistical program.
Findings: The findings support that the bullying behavior that migrant workers are exposed to in their workplaces pushes them to become entrepreneurs. Further, the findings indicate that IndEO does not moderate the mentioned relationship.
Originality: Unlike mainstream entrepreneurship literature, this study demonstrated that entrepreneurship is an 'imperative' stemming from unfavorable working conditions of migrant workers, rather than an 'attractive' phenomenon.
... Since 1978, its market reform has witnessed an utmost emphasis on economic growth to prove its legitimacy, but after the 4 June 1989, crackdown, the central government further adopted a renewed focus on social stability and political thought work (Brady and Wang 2009;Wang and Luo 2018). In the new millennium, the social stability goal has been the overarching concern of the central government because it threatens both the political order and the continued rapid growth of the economy (Knight 2013). Therefore, the Chinese leadership has spent much effort monitoring abnormal public sentiments and maintaining social stability. ...
This paper investigates the multiscale dynamic relations between China Central Television News (CCTV News) and investor sentiment in China by employing the wavelet method. We document significant positive correlations between CCTV News’s economic focus/economic tone and investor sentiment at the raw and high-frequency levels using the wavelet DCC-GARCH model. Wavelet Granger causality tests and wavelet coherence analysis confirm that the economic focus/economic tone of CCTV News is dominant and leads investor sentiment for short-term investors. At the same time, investor sentiment can conversely affect CCTV News’s economic focus/economic tone for medium-term investors. There is a long-term interdependence between CCTV News’s economic focus/tone and investor sentiment. Furthermore, the interaction between CCTV News and investor sentiment increases in turbulent periods compared with relatively calm periods. Finally, we find that CCTV News’s economic focus and tone positively affect the stock market returns. The influence seems to be an overreaction in the short term and an underreaction in the long term.
... A decade later, the country's exports fell by 40% in the wake of the global economic recession, resulting in rampant unemployment. The government responded by launching a large-scale economic stimulus plan, underpinned by a major infrastructure programme, the Belt and Road Initiative (BRI), that included dams, high-speed rail, highways and airport projects funded by the central and local governments (Chinese Academy of Social Sciences, 2018; Knight & Ding, 2012;Knight, 2013). To make way for these massive infrastructure projects, land and property were confiscated, housing was demolished, and millions of people were relocated without access to equivalent livelihoods, adequate compensation or support (Meier, 2009;Peng et al., 2019). ...
Social stability risk assessment (SSRA) has become the mainstream policy instrument for assessing potential risks of large-scale development projects across all sectors in China. In this paper, fuzzy qualitative comparative analysis (fsQCA) is used to quantify the impact of SSRA policy on economic competitiveness across China’s 31 provinces using a SSRA policy dataset (2003–2020) and a provincial economic competitiveness dataset (2019–2020). QCA combines Boolean algebra and set theory to identify configurations of conditions that are necessary or sufficient for a given outcome. Rather than following the mainstream statistical method of developing a single causal model that best fits the data, QCA explores multiple concurrent causality. A typology of SSRA policies was developed to guide our analysis. The research concluded that to support high economic competitiveness within provinces, SSRA policies must be structured around solving social stability problems and addressing a specific industry issue (e.g., pollution) in a particular industry (e.g., resources). Policies that only include one of these factors or that focus on the performance of government officials were found to contribute to low economic competitiveness. Reorienting the focus of SSRA policies could support more rigorous risk assessments and enhance economic competitiveness, particularly in provinces that host large-scale development projects. These findings have implications for China’s policymakers given their dual objectives of driving economic reform while maintaining a harmonious society.
... logical civilization (Gu, Li, & Han, 2015;Knight, 2013). At the 19th National Congress of the Communist Party of China in 2017, President Xi Jinping stressed: "China will carry out major projects to protect and restore key ecosystems, improve the system of shields for ecological security, and develop ecological corridors and biodiversity protection networks, so as to strengthen the quality and stability of our ecosystems" (Xi, 2017). ...
Rapid urbanization leads to fragmentation of landscape and destruction of ecological security network. A sound ecological security network promotes connectivity between ecological sources and mitigates the degradation of an ecological system. However, when identifying the ecological sources of the ecological network, the existing studies in the current literature did not simultaneously consider the structures, functions, and values of ecological patches. Our study aimed to fill this research gap, and the objective of this study was to improve the framework of assessing the ecological security network. We demonstrated the application of the proposed framework through a case study of the urban agglomeration around Hangzhou Bay (UAHB), a rapid urbanization region in Eastern China. We improved the identification method of ecological sources by integrating the evaluations of ecosystem services value and ecological sensitivity, while we screened ecological sources by using the rank‐size rule and the natural breaks method. Based on the screened ecological sources, the ecological corridors were reconstructed and optimized for the UAHB region. Results from this study showed that ecological network has actually improved in the UAHB in the last 20 years. However, the structure and function of the ecological security network were strongly influenced by human activities and urban sprawl. The ecological security network has deteriorated locally in eastern coastal areas of UAHB during the past 20 years with strong spatial variability in ecological security patterns. To maintain a well‐protected ecological quality, we proposed a set of 5 measures to improve the sustainable development of the ecological system.
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... -Advantages: Attractive achievements create aspirations and motivation for both the country and its inhabitants. -Disadvantages: seemingly primarily applicable to large economic scales [7,8,10,21], while Vietnam's economy only accounts for 2% of China's GDP in 2019 [24]; has critical social and environmental consequences [3,4]. ...
From its starting position as one of the world’s poorest countries at the onset of economic reforms, Vietnam has, over the last 35 years, been embracing the market economy and, as a result, has leapfrogged to its current position as a middle-income country while, at the same time, achieving impressive social outcomes. Transforming a poor country to a middle-income one over a comparable period of time is something many countries in the world, especially in Asia, have achieved. Few countries, however, can maintain rapid growth after such an economic leap and end up falling into the so-called “middle income trap”. Vietnam is thus seemingly at a crossroad; wherein, contemporary choices will affect the future prosperity. Reform efforts over the past decades have brought Vietnam onto a trajectory of rapid growth and have inspired its citizens to look to prior successful models of economic development, such as South Korea, Malaysia and China. This paper reviews the development models that Vietnam could consider in its efforts at becoming a prosperous and harmonious country by 2045. The authors have selected a number of successful examples that are similar to Vietnam. Based on the analysis of the commonalities and characteristics of three countries’ development models and strategies, the paper also presents four possible scenarios for Vietnam’s economic growth between 2030 and 2045. The rationale for choosing a path for Vietnam is based on a comparison of similarities and differences in the socioeconomic backgrounds of Vietnam and those countries at critical periods in their developmental paths.
... However, once the land finance period ends, the compensation received from the land will not equal the cost of the government's budget commitments or the cost of financing the government's huge debt load. As a result, China's role as "the world's factory" will be jeopardized by a wave of bankruptcies, creating chaos in the global economic system (Knight, 2013). In addition, China's national and local governments will face a difficult choice: either to endure a dramatic decrease in the money available to support China's continuing development, or to expand the currency supply to provide the necessary funds, thereby stimulating high rates of inflation. ...
Urbanization and socioeconomic development require huge investments. However, the history of developed countries suggests that an inefficient tax and financial system cannot meet this demand for investment. Historically, this has forced some countries to expand outward to secure the necessary resources, and this has caused great harm through colonialism and warfare. Therefore, finding a peaceful road to achieve urbanization and socioeconomic development is a crucial issue facing human society, particularly in developing nations. To provide insights, we examined China's land transfer model, which has made huge amounts of money available to support the infrastructure construction that accompanies urbanization and socioeconomic development. However, this approach also creates a serious risk of a financial and debt crisis that can jeopardize social stability and undermine future development.
... This denial restricts their access to the full benefits of citizenship, giving them the status of second-class citizens, and thus creates a social inequality that is peculiar to China (Chan, 2010). Unsurprisingly, the inequality between those with and without local household registration has caused many social problems, retarded economic growth and led to low-quality urbanization in China, especially when considering that the floating population had already reached 247 million in 2015 (Knight, 2013;Liang et al., 2014). Confronted with these consequences, China proposed a national new-type urbanization plan, in which the citizenization of the floating population is set as a core mission. ...
The floating population is a major source of social inequality in China and a direct target in its new-type urbanization plan. Although this population spread very unevenly both within and between provinces, and the responsibility for their citizenization lies mostly with local authorities, their geographical distribution and representation in the total population below province level remain understudied. This paper fills the gap. The county-level census data in 2010 were analyzed with the help of the cartogram technique. Results showed that the floating population was concentrated predominately in three key coastal regions and moderately in inland provincial capitals, with great variation both within and across key regions and provinces. Their share in the total population was also very high in the concentrations, closely followed by many counties along the coast and inland borders. Hence these ‘hot spots’ are very crucial for addressing social inequality and materializing the new-type urbanization plan in China.
... According to the International Monetary Fund (2016) the cost of corruption is about 1.5-2 trillion USD, which is approximately 2% of global GDP. Corruption is not only an ethical issue, it can cause high human rights problems, economic uncertainty and slower down socio-economic development (Knight, 2012). ...
Corruption is a curse for any country, as it negatively affects the economic activities and drags the whole society to worst conditions by increasing the poverty and social inequities. Recently the most critical factor for doing business in Pakistan is corruption. In order to give a comprehensive picture of corruption in Pakistan this article (1) critically analyses the literature regarding corruption, its impact on society and the business environment specifically in Pakistan, (2) focuses on business-related factors of corruption, (3) presents various anti-corruption initiatives of Pakistani companies and foreign good examples. Based on our research this study emphasizes that the government should take corrective actions and strengthen institutions and should work in collaboration with the private and civil sector to control the uprising corruption problems. Awareness against corruption in business sphere and general public is very much needed and implementing possible anti-corruption tools, companies can positively contribute to the fight against corruption and Pakistan's economic and social development.
... L'inégal déploiement des politiques sociales).27 Par conséquent, la tendance à la montée des inégalités de revenus entre provinces côtières et provinces de l'intérieur, entre zones urbaines et rurales, et entre hommes et femmes ne connaît pas non plus d'inflexion significative(Knight, 2013). L'étude récentede Piketty et al. (2016) confirme le creusement du fossé entre riches et pauvres : entre 1978 et 2015, la part des 10 % les plus aisés dans le revenu chinois est passée de 26 % à 41 %. ...
The Chinese regime of accumulation based on exports and investments seems to be reaching its limits. The Chinese leaders are convinced of the need to rebalance the economy by prompting domestic demand. The assertion of the social role of the State since the 2000s is part of this objective and has two aims: to reduce the contradictions of the current accumulation regime and to contain the risks of social instability by limiting the social risks stemming from the rise of market mechanisms. However, the institutionalisation of social policies formulated by central authorities is hampered by the resistance of local governments and capitalists. Consequently, inequalities persist, labour conflicts intensify, and the rebalancing of the accumulation regime is curtailed. The CCP is therefore in a paradoxical situation. As it officially stands for the interests of the population, it must promote a better integration of workers. However, by denying them the right to organise to defend their own rights, it deprives itself of a social force capable of putting pressure for the implementation of more protective rules within enterprises. Based on the example of collective bargaining experiences in the coastal provinces, we argue that better integration of workers’ interests into the industrial relations system would strengthen the obligations of employers and would support more broadly the economic and social objectives put forward by the central government.
... Although, some scholars assert that in certain situations, corruption may not necessarily be favourable to development (for example , Braguinsky 1996;Bardhan 1997;Castro et al. 2014), in most cases, corruption negatively affects development. For instance, corruption lowers investment and economic growth (Maunro 1995;Knight 2013). Interestingly, Healy and Ramanna (2013) recently suggested that corruption was cited as the biggest hurdle in business development. ...
The study seeks to understand the nexus between corruption and development within Southern Africa. A cross-national analysis of relevant data was constructed to demonstrate the relationship between corruption and regional development. The study highlights the costs of corruption for the region particularly from an economic developmental standpoint. Insights from the study contribute to scholarly debate relating to the ills of corruption and resulted in the development of a framework that might help to reduce the levels of corruption, enhance good governance, and advance sustainable development in the region.
... Described in the recent OXFAM (2017) report for example;Milanovic (2016); Piketty (2014). World Bank(2016)highlights the reversal of the trend of growing inequality in the last ten years. 2 See for exampleKnight (2012); de Haan (2010) discusses this in the context of responses to the 2007-08 financial crisis. ...
This paper prepared for a UN DESA expert group meeting explores more opportunities to address high and often growing inequalities, around the concept of inclusive growth. Existing data suggest that perceptions of inequality show great diversity across countries, and do not seem to square easily with inequalities as they are commonly measured. I suggest that opposition to public transfers does not necessarily mean opposition to promoting equality in the market sphere, and social contracts understood in the broad sense including private sector actors have historically contributed to this. Further experimentation with, and scaling of new market-oriented approaches, and the documentation of experience can play an important role in addressing global inequalities.
... In the meantime, however, these families deserved opportunities equal to those the locally registered people enjoyed. The central government realized the urgent need to address these practical issues, otherwise, they knew, social stability could be greatly undermined (Knight 2013). The guarantee of migrant children's equal access to compulsory education in inflow cities is an important aspect of floating population service. ...
This chapter is a case study on migrant children’s compulsory education policies and their implementation in Wu City, a large migrants-inflow city in China. China’s central government has made inspiring promises to ensure migrants’ children equal access to public compulsory education with the “Two Primaries” policy; however, local education authorities at the city and county levels decide whether or not to implement the policy. Using data collected from the Wu City education department, local schools, and interviews with officials and administrators, this chapter highlights the predicaments faced by local authorities responsible for implementing the policy, including: non-migrants’ concerns, the dichotomy between the governmental budgetary burden and potential economic prosperity, the struggle between providing equitable education and the quality of education, and the historical mobility of migrant workers. Local education authorities at the city level are in the middle of what we are calling the “promise-practice framework.” These officials are directly answerable to city stakeholders, but they are also burdened by limited executive powers to resolve the problems, thus contributing to an environment of conflicts.
... (Sutherland & Yao, 2011) There is a connection between income inequality and suicide rates (Fernquist, 2003). There is research that social turmoil has been growing in China due to sluggish of sociopolitical reform (Knight, 2013) , which may also increase the risk of suicide for ...
... This has significantly increased the costs of maintaining political stability and encouraging the development of a national market (Heinemann and Tanz, 2008;Ip and Law, 2011). Additional challenges include increased social inequality, many environmental crises, the risk of political instability (Knight, 2013), a rising crime rate and rising unemployment, and widespread corruption (Dong and Torgler, 2013;Wang and You, 2012). These changes have been accompanied by growing numbers of commercial disputes, protest movements, growing rural poverty, and the spread of HIV and other infectious diseases (Whyte, 2009;Yang, 2006;Zhang, 2006;Figure 2). ...
... This has significantly increased the costs of maintaining political stability and encouraging the development of a national market (Heinemann and Tanz, 2008;Ip and Law, 2011). Additional challenges include increased social inequality, many environmental crises, the risk of political instability (Knight, 2013), a rising crime rate and rising unemployment, and widespread corruption (Dong and Torgler, 2013;Wang and You, 2012). These changes have been accompanied by growing numbers of commercial disputes, protest movements, growing rural poverty, and the spread of HIV and other infectious diseases (Whyte, 2009;Yang, 2006;Zhang, 2006;Figure 2). ...
China’s economic and political reforms since 1978 represent one of the biggest institutional changes in the last century. Because most research has focused on the economics of institutional change rather than the evolution of political institutions, a theoretical framework to explain China’s rapid economic development is lacking. To understand the successes and failures of China’s institutional change, we reviewed China’s innovative political and economic practices during the past 30 years. We found that the country’s political and economic institutions combine to form a dynamic equilibrium that can explain the impressive economic results. China’s leaders dream of new institutions that will improve upon traditional Western capitalism, based on a combination of central planning with traditional capitalist approaches that increase the system’s flexibility. If China’s leaders can combine this approach with decreased social costs compared with previous socioeconomic systems, this will represent a new era and a model that other nations can follow.
... 2. Since early 90s, China faced a proliferation of "mass incidents" (cases of civil unrest officially recorded) that rose from under 9,000 in 1993 to 180,000 in 2010. A substantial share of such incidents is due to protests against the expropriation of agricultural land (Knight, 2013). ...
Over the last two decades, subjective well-being in China declined. Using data from the World Values Survey, we identify predictors of the trend in life satisfaction in China during 1990–2007. Social comparisons and the decline of social capital explain the decrease in well-being, and they are strictly connected to the increasing orientation of Chinese people toward materialistic values. The increasing role of social comparisons is also a key factor in the increase of well-being inequalities between income classes.
... Fostered by increasing consumption and investment, the per capita Gross Domestic Product (GDP) rose to 38,325 RMB Yuan in 2012, almost a one hundred-fold increase over the per capita GDP in 1970. Moreover, public services including education, healthcare, and transportation have greatly improved (Knight, 2013). Consequently, to accommodate the demand for urban land to sustain these activities, chronic disorderly sprawl has been occurring nationwide (Hubacek, Guan, Barrett, & Wiedmann, 2009;Oizumi, 2011;Taubenb€ ock et al., 2014). ...
... 2. Since early 90s, China faced a proliferation of "mass incidents" (cases of civil unrest officially recorded) that rose from under 9,000 in 1993 to 180,000 in 2010. A substantial share of such incidents is due to protests against the expropriation of agricultural land (Knight, 2013). ...
China is one of the countries that experienced the most impressive and sustained rate of economic growth.
Since 1990s its economy has been increasing on average by 9.7% each year. Arguably, economic growth allowed a general improvement of several social, economic and sanitary dimensions of people’s life. However, in the same period people’s satisfaction with their life decreased.
What does explain this outcome? And who are the winners and the losers from economic growth? Finally, if economic growth did not improve the human lot, did it at least reduce well-being inequalities?
Using data from the World Values Survey, this paper identifies the determinants that shaped people’s life satisfaction in China between 1990 and 2007. Results suggest that the erosion of
social capital and social comparisons are the two main factors explaining why economic growth did not turn into higher people’s well-being. Moreover, economic growth resulted in
higher well-being disparities among people: those in the lowest three deciles and the middle-class experienced a significant reduction in well-being, whereas richer people substantially
improved their conditions.
... 2. Since early 90s, China faced a proliferation of "mass incidents" (cases of civil unrest officially recorded) that rose from under 9,000 in 1993 to 180,000 in 2010. A substantial share of such incidents is due to protests against the expropriation of agricultural land (Knight, 2013). ...
The formidable economic growth of China in the past few decades led to outstanding improvements in virtually all objective indicators of standards of life. However, these objective records are in striking contrast with subjective ones. Between 1990 and 2007, Chinese average subjective well-being substantially declined. Using data from the World Values Survey, this paper identifies the predictors of the trend of life satisfaction in China between 1990 and 2007. Our findings suggest that subjective data capture something that objective data miss and that can explain the decrease in well-being: the increase in the importance of social comparisons and the decline of social capital. Moreover, economic growth resulted in higher well-being inequality: those in the lowest three income deciles and the middle-class experienced a significant reduction in well-being, whereas the latter increased among richer people. Differences in the erosion of social capital and in the impact of social comparisons seem to be the key to well-being differences among classes.
Does investing in the development of rural communities exacerbate or ameliorate spatial inequalities between urban and rural areas? developments, such as expansion of national transportation networks, could have two plausible effects with respect to inequality: integration with urban areas could prompt outmigration and brain drain, or it could attract additional investment to towns and villages. Drawing on data from three waves of the China Family Panel Studies, this paper explores how the expansion of long-distance bus stations contributed to the development trajectories of rural China. By leveraging an inductive approach using mixture models, I find that expansion of transportation networks result in two contradictory processes: in some villages, expanded long distance bus travel prompts migrants who would otherwise have stayed in their villages to migrate, while in others would-be migrants stay home. Analysis finds that the outward ‘brain drain’ effect is strongest in relatively poor and remote villages. Taken together, these findings suggest that local development differentially impacts rural regions, favoring those who were already ahead and accelerating the decline of villages that had already been struggling. These findings point to the importance of understanding heterogeneity within spatial processes.
This paper identifies the roles of an environmental protection policy and income growth in enhancing environmental quality in China. In 2005, the Central Government of China piloted a policy that linked regional environmental quality to the performance assessment of local government officials in some provinces. After the implementation of the policy, pollution levels reduced substantially. However, many researchers believe that the improvement of China’s environmental quality might have been due to an increase in per capita income, i.e., there is the presence of an “environmental Kuznets curve.” We use a nonparametric IV model and a synthetic control method to identify the role of income and policy in improving environmental quality. Results show that after controlling for the mutual effects of the two factors, income level had an inverted U-shaped relationship with sulfur dioxide and wastewater emissions. There are differences in the effects of policies on pollution reduction among different cities, and the magnitude is affected by regional economic development. Our findings contribute to the understanding of the effects of income and policy on pollution reduction.
This study examined the relationship between social instability, foreign direct investment, and economic growth in 20 sub-Saharan Africa countries, between 1988 and 2019, spanning 30 years. In achieving the specific objective set, OLS was used as the estimation technique to establish the effect of social instability on foreign direct investment and economic growth. From our findings, there is evidence of significant negative relationship between social instability on foreign direct investment. While many African countries have instituted policies to attract FDIs in the last three decades, not much has been done to ensure a stable socio-political and economic environment. We recommend that while African countries adopt flexible macroeconomic and government policies aimed at encouraging business investors, a stable socio-political environment is required to achieve a sustained growth that will attract FDIs inflows in the long run.
Prior empirical research on the relationship between socioeconomic status (SES) and meritocratic attitudes has yielded inconsistent findings. This study contributes to the existing literature by examining the heterogeneous relationship between SES and meritocratic beliefs and perceptions across community socioeconomic contexts in China. Using nationally representative data from the China Family Panel Studies, the results show that individual SES is positively related to support for meritocratic beliefs, but negatively associated with perceptions of meritocracy. Moreover, SES disparities in meritocratic beliefs are more salient in socioeconomically disadvantaged and unequal communities, where residents with relatively higher SES are more likely to hold meritocratic beliefs. In contrast, SES gaps in meritocratic perceptions are more significant in socioeconomically advantaged and homogeneous communities, where individuals with relatively lower SES are more likely to perceive the allocation of resources as meritocratic. These findings provide theoretical insights for understanding how self-interest and system justification theories may jointly explain social origin disparities in public attitudes about meritocracy.
Prior research studies how chief executive officers’ (CEOs’) demographic characteristics, such as gender and age, impact firm unethical behaviors. However, the effect of CEOs’ biological traits on corporate illegality is not fully known. Grounded in the approach/inhibition theory of power, this article analyzes whether and how one of male entrepreneurs’ most obvious genetically determined biological traits, facial masculinity, predicts the corporate illegality of new ventures. Biological traits are mainly genetically determined. They not only shape an individual's psychological process, but also impact behaviors. Recently, scholars repeatedly call for incorporating entrepreneurs’ biological traits into entrepreneurship research. Based on a sample of Chinese firms listed in the growth enterprise market from 2010 to 2016, we identify and quantify male entrepreneurs’ facial masculinity with the artificial intelligence facial recognition technology Face++. We find a positive relationship between male entrepreneurs’ facial masculinity and new venture corporate illegality. Moreover, we explore the moderating role of individual differences (personal accountability) and social factors (social instability). These factors decrease the likelihood of male entrepreneurs with more facial masculinity to engage in new ventures corporate illegality. Although the facial masculinity of firm leaders may benefit firms by improving firm performance, our results show that there is a need to consider this stably biological trait when predicting unethical behaviors among new ventures.
Through use of a unique, multi-year public opinion survey, this paper seeks to measure changes in self-reported governmental satisfaction among Chinese citizens between 2003 and 2016. Despite the persistence of vast socio-economic and regional inequalities, we find evidence that low-income citizens and residents living in China's less-developed inland provinces have actually reported comparatively greater increases in satisfaction since 2003. These results, which we term the “income effect” and “region effect” respectively, are more pronounced at the county and township levels of government, which are most responsible for public service provision. Our findings also show that the satisfaction gap between privileged and more marginalized populations in China is beginning to close, in large part owing to efforts by the Hu Jintao and Xi Jinping administrations to rebalance the gains of economic growth and shift resources towards the populations most overlooked during China's first few decades of reform.
Land-related conflicts have become a major cause of social unrest in China. It is common indeed for the institutional changes that accompany development to generate tensions and frictions, notably regarding land rights. Using survey data on land practices and governance in Chinese villages and prefecture-level statistics about investment in the real estate sector, we show that administrative reallocations of village land by local authorities increase with the level of real estate activity and that this effect is mitigated by the development of village-level democracy. These results are consistent with those of the handful of existing empirical studies on this topic. We thus provide empirical insight into the factors governing the evolution of land rights and land institutions in rural areas in China and the related conflicts, as well as, more generally, into the dynamics of institutional change.
We develop a theory of how state officials’ political incentives can affect corporate behavior. In the pursuit of multiple goals, such as social stability and economic development, the state designs criteria to evaluate its officials’ performance. Those officials may be motivated to prioritize different goals at different stages of their careers and to mobilize firms to help them achieve those goals. We test our theory in the context of Chinese publicly listed firms’ diversification between 2001 and 2011, when the state faced economic and social ramifications of bankrupt state-owned enterprises (SOEs) laying off large numbers of workers. Our results show that when large layoffs occurred, some firms diversified into industries unrelated to their core business by acquiring bankrupt SOEs and reemploying their workers. This was more likely to occur when the governor of the firm’s home province was closer to retirement, as social stability was more important than economic development for the retiring governor’s career objective. The effect of career stage was weaker for Communist Party leaders, who more consistently prioritized social stability, and when a provincial state experienced intense collective actions that made social stability a stronger immediate focus. The effect was strengthened for firms more vulnerable to officials’ influence, such as those with a strong socialist imprint and those dependent on government resources. Our study extends the Weberian state literature and the political economy research on incentives, and it offers a political explanation for corporate diversification in a major transitional economy.
Purpose
Because of increasing wealth inequality, China has been confronted with resentment against the rich (referred to hereafter as RAR or Choufu in Chinese), which is a growing concern owing to its potential to foment social conflict. Drawing on social comparison and deonance theories, this paper aims to provide theoretical insights into RAR within the Chinese context and to develop an RAR scale. Following spillover theory, the attitudinal and behavioral outcomes of RAR in organizational settings will be explored.
Design/methodology/approach
This research consists of two studies. Study 1 conceptualizes RAR and develops an RAR scale by using three separate samples. Exploratory and confirmatory factor analyses are conducted to establish scale reliability and validity. Study 2 uses hierarchical linear regression analysis to test whether employees’ RAR attitude spills over from the societal to the organizational setting.
Findings
Results suggest that RAR can be conceptualized as two distinct but related dimensions – emotional RAR and moral RAR. These two forms spill over to the workplace, influencing employees’ work attitudes and behaviors. Emotional RAR relates negatively to life satisfaction and prosocial organizational behaviors and positively to unethical organizational behaviors. Moral RAR relates negatively to pay satisfaction and positively to prosocial behaviors.
Practical implications
This research suggests that RAR has spillover effects from societal to organizational settings and demonstrates that a more robust understanding of employees’ workplace experience requires acknowledging social experiences, such as conflicts beyond the workplace.
Originality/value
This research contributes to the conflict management literature by exploring RAR as a negative attitude that serves to potentially ignite social conflict. It not only develops a theory-grounded, conceptual RAR model and a reliable RAR scale but also for the first time explores RAR attitudinal and behavioral outcomes beyond the social domain. This study serves as a meaningful touchstone for future research to incorporate social attitudes into organizational behavior research.
The paper questions the normative value in the Chinese case of standard measures of aggregate income inequality such as the Gini coefficient. Evidence is adduced that people have narrow frames of reference and that they distinguish between income inequalities that they perceive to be fair and those that they perceive to be unfair. It is suggested that value judgements about what is fair or unfair can be guided by people’s own perceptions. People’s perceptions of unfairness can also be important to a government concerned to avoid social instability. The estimation of happiness functions can help to make the relevant distinctions. Examples are given of how fair and unfair inequalities might be identified, using either a criterion of people’s perceptions or one of informed judgements. Unfairness might be more strongly felt in inequalities of economic power than in inequalities of income, although the former can in turn result in inequalities of income. An argument is made for China researchers to extend inequality research and research instruments towards an economics of fairness and unfairness.
The frictions between EĞİTİM-SEN (a KESK affiliate) and EĞİTİM-İŞ are exemplary of the ways in which the over-articulation of identity politics can lead to the fragmentation of unions. As Hüseyin Tosu of EĞİTİM-SEN asserts, “EĞİT-SEN [Eğitim ve Bilim Emekçileri Sendikası, or Education and Science Workers Union, a predecessor of EĞİTİM-SEN] was a union formed by leftists, socialists, and Kurdish patriots from the very first day it was organized, whereas EĞİTİM-İŞ was represented mostly by social-democrat, leftward civic nationalists [ulusalcılar in Turkish]” (Interview with Hüseyin Tosu). In Tosu’s words, the main focus of EĞİTİM-SEN on the Kurdish question has been the struggle for the “co-existence of differences, different colours, different languages, and different cultures in the name of a scientific, democratic education in one’s own vernacular language.” Therefore, for the most part cultural rather than mere class grievances were considered when organizing EĞİTİM-SEN.
Purpose
The purpose of this paper is to study convergence and income mobility of China’s rural households.
Design/methodology/approach
The data of rural household income per capita are employed to compute the transitional dynamics in the rural sector. The analyses are conducted at two spatial levels, namely, the national and provincial levels. Ergodic distributions are computed to provide a forecast of future income distributions, whereas Mobility Probability Plots are constructed to offer detailed information on the transitional dynamics.
Findings
The income distributions are found to have considerable persistence. Another finding is that most of the households (except the extremely low-income households) have a tendency of moving downwards in the income distribution though they are more likely to remain in the same levels of relative income because of their high persistence. Convergence to a unimodal income distribution is possible in the long run, however, the households will converge to a value which is far below China’s per capita gross domestic product.
Research limitations/implications
Since a lot of the rural households would congregate to the lower part of the income distribution if the transitional dynamics remain unchanged, therefore, it calls for government intervention.
Practical implications
More resources should be diverted to the rural sector.
Social implications
The finding also shows that the provinces have very different transitional dynamics even if they are situated in the same economic zone. Thus, the government should formulate province-specific development polices so as to promote greater equality.
Originality/value
Given that no recent research has been conducted on convergence and transitional dynamics of rural household income. Therefore, this paper attempts to fill the gap in the literature by investigating the pattern and future development of rural household income in China through the use of stochastic kernel approach.
Land-related conflicts have recently become a primary cause of social unrest and a major political issue in China. Indeed, as is generally the case in the course of development, the process of institutional change, which also affects land rights in rural areas, generate tensions and frictions. Using survey data on land practices and governance in Chinese villages and national statistics about investment in the real estate sector, we confirm the results of the handful of empirical studies on this topic in China, by showing that practices such as administrative reallocations of land by village leaders positively depend on the level of real estate activity but that this effect is mitigated by the development of village-level democracy. We thus bring empirical evidence on the factors behind the evolution on land rights in China's rural areas and the related conflicts, as well as, more generally, on the dynamics of institutional change that accompanies development.
We offer an interdisciplinary study of computer science and social science, analyzing behavior surrounding three types of online events: political events, social events, and non-public events. Based on the intrinsic characteristics of the three event types, this paper creates an effective method to predict such events. We continuously followed and recorded data every 10. min for 10. months from September 14, 2012 to July 11, 2013, and collected over 14 million "hot" posts from Sina Weibo, the largest microblogging provider in China. After removing spammers and noises, we developed a database of 4180 hot online events and 7,761,395 threads. We found that people's online behavior regarding event types varies in terms of follow-up statistics and the predictability of events. The Chinese are, typically, quite concerned with social affairs that relate most closely to their personal interests and preferences. People tend to cluster around political events more often than social events and non-public events. This is demonstrated by an algorithm embedded with a clustering growth pattern of events, which predicts the popularity of online political events above others. The statistical findings are justified by Habermas' public sphere theory and the theory of vertical/horizontal collectivism/individualism. This research provides an interesting piece of computational social science work to assist in the analysis of incentives concerning China's collective events.
In China, SIA dimension in development has recently emerged in response to growing protests against displacement. This chapter provides a comprehensive overview on these new developments. Initially, planning for rapid development focused mainly on technical, economic and financial aspects, with social and environmental aspects remaining into the background. Gradually, things began to change. In 1989, environment emerged as an additional input into the process of development planning. While formal SIA does not exist in China as yet, key development agencies have begun moving in this direction. And for certain kinds of projects SIA has now become a formal requirement. In addition to focusing on SIA experience in China, this overview also looks at the impacts of it growing investment projects in Africa and other countries in Asia and Latin America. The Chinese companies are not particularly known for integrating social and environmental concerns in investment projects abroad. Efforts are currently continuing to improve the situation both in overseas projects and also in projects at home. But still there is a long way to go.
There is a widespread consensus that China needs to rebalance its export-driven growth paradigm towards a more consumption-based one and that such process is to be accompanied by the transition towards the renminbi's full convertibility. However, the Chinese authorities have so far acted with great caution because this transition cannot but accelerate the slowdown of China's growth which will likely occur because of other structural factors. We address these issues by means of a two-country two-stage (before and after the renminbi's full convertibility) model, which reproduces some qualitative features of China's growth pattern and its relationship with the United States. We analyse the extent to which altering the Chinese exchange rate regime, as well as other policies affecting sensitive social and economic issues, may impact on the short-, medium- and long-term evolution of the Chinese economy. The paper shows that by lifting the controls on the capital account and letting the currency float, the Chinese authorities will renounce those policy instruments for controlling the allocation of the national resources and the dynamics of China's economy.
The article examines a wave of teachers' strikes that spread across China during the fall, winter and spring of 2014-2015. Looking at event data and social media coverage of the wave, it discusses how social media enabled protesters to carry out media-savvy campaigns that involved both online and offline tactics, draw inspiration from claimants in faraway protest sites, and emulate tactics, slogans and symbols from other locations. The episode indicates that claimants in contemporary China are utilizing new media break the geographic bounds of localized protests, and while falling short of nationally coordinated protest movements, are able to generate widespread, cross-regional protest waves that place greater pressure on subnational authorities to give in to protester demands.
The current unsustainable growth of the world economy is largely a consequence of the crisis of social capital experienced by much of the world’s population. Declining social capital leads economies towards excessive growth, because people seek, in economic affluence, compensation for emotional distress and loss of resources caused by scarce social and affective relationships. To slow down economic growth requires an increase in social capital that is a fundamental contributor to happiness. From a wide range of possible approaches to increasing present happiness, this article suggests policies that would shift the economy to a more sustainable path. It focuses on a more politically sustainable set of proposals for a green ‘new deal’ than some of those currently under discussion.
Beginning with a literature review of globalization, economic inequality, and political stability, a series of quantitative models are presented to identify interweaving relationships. Using the knowledge gained from these models, combined with events extracted from science fiction, several scenarios of the United States are constructed. These scenarios are useful to anticipate future consequences of emerging issues, and to influence the policy making process by providing a structured environment to examine assumptions regarding the future.
China's leaders have often expressed concerns about social instability, viewed as a threat both to the political order and to continued rapid growth. Slower growth might, in turn, further undermine social stability. Using survey data, the present paper examines the economic determinants of social instability. Four main determinants are identified: past and expected growth of income, income inequality, economic insecurity and misgovernance. The paper then considers possible policies to reduce social instability, examining each of the determinants in turn.
Democracy is regarded as a worthy value by most Chinese people including the top leadership, yet in the last two decades, it seems that no progress has been made towards a democratic China. The majority of Chinese people seem content with the current regime. Defying the predictions of social and political theorists, the Communist Party of China (CPC) has not withered away, but instead has become more sophisticated in its management of the country. Indeed, there is a trend both within and outside China that attributes China's phenomenal economic growth to the authoritarian nature of its government. Compared with a democratic government, it is believed that an authoritarian government is able to mobilise large amounts of resources to tackle the most urgent bottlenecks of growth.
Why has open demand for democratisation not accompanied economic development in China? Is China indeed creating an enduring form of authoritarianism that beats the conventional logic of political transformation? This article will attempt to provide answers to both questions.
The answer to the first question has a lot to do with the CPC's growth-centred strategy adopted at the end of the 1970s when economic reforms began. With sustained economic growth and auxiliary expansion of civil liberties, this strategy has largely worked to divert people's demand for democracy. Along the way, the Party has transformed itself from a proletarian party to a party without a real political conviction, which substantially enlarges its political bases by attracting the newly emerged middle class and business elites. Recent literature also frequently cites these factors as causes for the delay of democratisation in China. In particular, McNally and Wright emphasise the role played by the political "thick embeddedness" of private capital holders — that is, the strong and encompassing alliance between private capital holders and the current political regime — as an important cause for delayed democratisation in China. In a similar vein, Dickson believes that the current Chinese political regime would survive in the form of "crony communism". While we do not dispute the facts used by these writers to formulate their propositions, we interpret the move of the business elites as an incidental consequence of the CPC's ideological transformation to enlarge its political bases. In essence, the CPC still wants to maintain its disinterestedness vis-à-vis the society, that is, not to affiliate with any social group either by political conviction or by policy favours. The emergence of strong business elites is a natural development in a political system that lacks popular participation.
The answer to the second question is likely to be a "no". The authoritarian elements of the government are distorting the economy and aggravating China's structural imbalance problems among which declining shares of residential income and high inflationary pressures are causing popular discontent. On the other hand, people have more freedom to develop diverse objectives. The political atmosphere has become more accommodating and the society more assertive. More significant but quieter changes are happening within the establishment. Many functions of the Party and the government have been institutionalised. These developments may not establish full democracy, but have laid solid social and political foundations for it. That is to say, economic progress is bringing political changes to China, albeit at a gradual and incremental pace.
The next section discusses the formation of the CPC's growth-centred strategy and how it led to the expansion of civil liberty and deferred the demand for democratisation. This is followed by an exploration of the forces brought about by the growth-centred strategy that have put China on the path towards democratisation, and an explanation of China's path to democratisation from an international perspective.
Democratic movements started during the Cultural Revolution; the April Fifth Movement in 1976 was the culminating point of spontaneous resistance to the disastrous policies of the Cultural Revolution. Through the 1980s, democratic movements continued and finally led to the 1989 student movement. The setback of the movement, however, served as a turning point. As the economic reforms resumed after Deng Xiaoping's tour to the south in the spring of 1992, ordinary people and intellectuals alike found an opportunity...
This volume, prepared for the UN High-Level Meeting on Happiness and Well-Being, sponsored by the Government of Bhutan, April 2, 2012, presents and analyzes measures of subjective well-being for up to 150 countries, reviews the scientific support for these measures, and presents new results explaining differences in happiness among individuals and nations.
Various measures of satisfaction with life or happiness in China appear not to have risen in recent years, despite China's remarkable growth of income per capita. The paper brings together and integrates the results of four papers by the authors to provide a methodologically and substantively innovative explanation for this paradox. The four papers are based on a cross-section national household survey relating to 2002 and containing questions on subjective well-being. Their findings help to explain the time-series evidence: they highlight the importance of relative income, rising urban insecurity, rapid urbanization, and changing reference groups in preventing happiness from rising with income.
Despite its unprecedented growth in output per capita in the last two decades, China has essentially followed the life satisfaction trajectory of the central and eastern European transition countries--a U-shaped swing and a nil or declining trend. There is no evidence of an increase in life satisfaction of the magnitude that might have been expected to result from the fourfold improvement in the level of per capita consumption that has occurred. As in the European countries, in China the trend and U-shaped pattern appear to be related to a pronounced rise in unemployment followed by a mild decline, and an accompanying dissolution of the social safety net along with growing income inequality. The burden of worsening life satisfaction in China has fallen chiefly on the lowest socioeconomic groups. An initially highly egalitarian distribution of life satisfaction has been replaced by an increasingly unequal one, with decreasing life satisfaction in persons in the bottom third of the income distribution and increasing life satisfaction in those in the top third.
Introduction: Since the mid-1990s the pace of economic reform in China's urban labor market has accelerated. One contributing factor was the draconian labor retrenchment program in the state sector: Many previously secure workers were thus thrown into a new labor market. Another contributing factor was the corporatization or privatization of much of the state sector. This institutional change brought with it less state control and more concern with profits. Nevertheless, various obstacles to the creation of a functioning labor market continued. The social and collective nature of the Chinese work unit (danwei) remained powerful, and the rate of labor mobility between employers remained extremely low. In this chapter we examine the ways in which the urban wage structure changed over the 1995–2002 period, and in particular the extent to which wages came to be determined by market forces. We draw on the two strictly comparable cross-section CHIP surveys relating to the years 1995 and 2002, described in Chapter 1 and the Appendix to this book. Owing to the administrative and economic divide between urban and rural China, reflected also in the organization of survey work by the National Bureau of Statistics (NBS), separate survey instruments were employed in the urban and rural areas. In this chapter we analyze the two urban samples, which covered 11 provinces in 1995 and 12 provinces in 2002 (effectively the same number, as Sichuan and Chongqing had been divided in 1999).
Introduction The development of income inequality in urban China is a hot topic. There is agreement that income inequality has tended to increase over the years, but evidence indicates that the development has not been smooth. For example, previous studies based on the China Household Income Project (CHIP) have found that earnings inequality at the individual level as well as income inequality at the household level in urban China increased profoundly from 1988 to 1995. However, although from 1995 to 2002 earnings inequality continued to increase, income inequality at the household level decreased modestly (Gustafsson, Li, and Sicular 2008). Rapid growth in incomes caused urban poverty, assessed by a poverty line representing constant purchasing power (“absolute poverty”), to diminish rather substantially (Appleton, Song, and Xia 2010). What has happened more recently, during the initial phase of the Hu Jintao–Wen Jiabao leadership (2002–2007)? In this chapter we aim to shed new light on developments during this period using data from the CHIP urban household survey. Our first research question is, How did income, income inequality, and poverty develop? To answer this question, we show income growth curves and report estimates of income inequality. Furthermore, we show cumulative density functions and report summary measures on absolute and relative poverty for 1988, 1995, 2002, and 2007. The second research question is, What were the forces for change during the period from 2002 to 2007? To understand this, we decompose the Gini coefficient of disposable household per capita income by income components for 2002 and 2007. The third research question is, How have various categories of the population fared during the period from 2002 to 2007? To answer this question we look at differences among groups based on ownership, sector, age, and education.
We investigate the causes of civil war, using a new data set of wars during 1960-99. Rebellion may be explained by atypically severe grievances, such as high inequality, a lack of political rights, or ethnic and religious divisions in society. Alternatively, it might be explained by atypical opportunities for building a rebel organization. While it is difficult to find proxies for grievances and opportunities, we find that political and social variables that are most obviously related to grievances have little explanatory power. By contrast, economic variables, which could proxy some grievances but are perhaps more obviously related to the viability of rebellion, provide considerably more explanatory power.
With an equal social structure, China seems to be better prepared for a functioning democracy than other developing countries. It has stayed authoritarian because the CCP has successfully diverted the demand for democratization through tactics of economic growth, expansion of civil liberty, and selective accountability. However, the results of these tactics inevitably bring about forces and elements arguing and even fighting for democratization. As a result, there are more democratic elements in China than people usually believe and these elements are growing. Chinas path to democratization may prove to be appropriate taking into account Chinas recent history and cultural heritage.
The high and rising household savings rate in China is not easily reconciled with the traditional explanations that emphasize life cycle factors, the precautionary saving motive, financial development, or habit formation. This paper proposes a new competitive saving motive: as the sex ratio rises, Chinese parents with a son raise their savings in a competitive manner in order to improve their son’s relative attractiveness for marriage. The pressure on savings spills over to other households. Both cross-regional and household-level evidence supports this hypothesis. This factor can potentially account for about half the actual increase in the household savings rate during 1990–2007.
A specially designed household survey for rural China is used to analyse the determinants of aspirations for income, proxied by reported minimum income need, and the determinants of subjective well-being, both satisfaction with life and satisfaction with income. It is found that aspiration income is a positive function of actual income and reference income, and that subjective well-being is raised by actual income but lowered by aspiration income. These findings suggests the existence of a partial hedonic treadmill, and can help to explain why subjective well-being in China appears not to have risen despite rapid economic growth.
The paper examines the contentious issue of the extent of surplus labour that remains in China. China was an extreme example of a surplus labour economy, but the rapid economic growth during the period of economic reform requires a reassessment of whether the second stage of the Lewis model has been reached or is imminent. The literature is inconclusive. On the one hand, there are reports of migrant labour scarcity and rising migrant wages; on the other hand, estimates suggest that a considerable pool of relatively unskilled labour is still available in the rural sector. Yet the answer has far-reaching developmental and distributional implications. After reviewing the literature, the paper uses the 2002 and 2007 national household surveys of the Chinese Academy of Social Sciences to analyse and explain migrant wage behaviour, to predict the determinants of migration, and to examine the size and nature of the pool of potential rural–urban migrants. An attempt is also made to project the rural and urban labour force and migration forward to 2020, on the basis of the 2005 1% Population Survey. The paper concludes that for institutional reasons both phenomena are likely to coexist at present and for some time in the future.
Examining onsets of political instability in countries worldwide from 1955 to 2003, we develop a model that distinguishes countries that experienced instability from those that remained stable with a two-year lead time and over 80% accuracy. Intriguingly, the model uses few variables and a simple specification. The model is accurate in forecasting the onsets of both violent civil wars and nonviolent democratic reversals, suggesting common factors in both types of change. Whereas regime type is typically measured using linear or binary indicators of democracy/ autocracy derived from the 21-point Polity scale, the model uses a nonlinear five-category measure of regime type based on the Polity components. This new measure of regime type emerges as the most powerful predictor of instability onsets, leading us to conclude that political institutions,properly specified, and not economic conditions, demography, or geography, are the most important predictors of the onset of political instability.
How has the Chinese economy managed to grow at such a remarkable rate - no less than ten per cent per annum - for over three decades? This well-integrated book combines economic theory, empirical estimation, and institutional analysis to address one of the most important questions facing contemporary economists. A common thread that runs throughout the book is the underlying political economy: why China became a 'developmental state', and how it has maintained itself as a 'developmental state'. The book examines the causal processes at work in the evolution of China's institutions and policies. It estimates cross-country and cross-province growth equations to shed light on the proximate, and some of the underlying, determinants of the growth rate. It explores important consequences of China's growth, posing a series of key questions, such as: is the economy running out of unskilled labour; why and how has inequality risen; has economic growth raised happiness; what are the social costs of the overriding priority accorded to growth objectives; can China continue to grow rapidly, or will the maturing economy, or the macroeconomic imbalances, or financial crisis, or social instability, bring it to an end? Based mainly on original research, this book will be of interest to growth economists, development economists, transition economists, China specialists, policy-makers, and indeed all those who are intrigued by the Chinese growth phenomenon. Contributors to this volume - John Knight Sai Ding and John Knight John Knight John Knight
The paper presents subjective well-being functions for urban and rural China, based on a national household survey for 2002. Whereas the vast income disparity between urban and rural households is confirmed, it is found that, remarkably, rural households report higher subjective well-being than do their richer urban counterparts. A decomposition analysis explores the reasons for this reversal. It finds that there are many determinants of happiness other than absolute income, and that the determinants differ in the two sectors. An explanation for the puzzle is advanced in terms of relative concepts, income inequalities, orbits of comparison, and degrees of insecurity. Positive and normative implications are discussed.
In 1974, Richard A. Easterlin, a coauthor of the work by Easterlin et al. (1) in PNAS, published a seminal article (2) that has generated a huge literature. It sought to explain why the happiness score in the United States (and elsewhere) had stayed roughly constant, whereas income per capita had trended up. This evidence has come to be known as the Easterlin Paradox. His explanation was that economic growth has a positive effect on happiness with other things being equal; however, it also raises aspirations, and aspirations have a negative effect. Aspirations are determined by society, particularly reference group income. The combination of these two effects gives rise to a Hedonic Treadmill.
A national household survey for 2002, containing a specially designed module on subjective well-being, is used to estimate pioneering happiness functions in rural China. The variables that are predicted by economic theory to be important for happiness prove to be relatively unimportant. Our analysis suggests that we need to draw on psychology and sociology if we are to understand. Rural China is not a hotbed of dissatisfaction with life, possibly because most people are found to confine their reference groups to the village. Relative income within the village and relative income over time, both in the past and expected in the future, are shown to be important for current happiness, whereas current income is less so. Even amidst the poverty of rural China, attitudes, social comparisons and aspirations influence subjective well-being. The implications of the findings for the future and for policy are considered.
An unstable macroeconomic environment is often regarded as detrimental to economic growth. Among the sources contributing to such instability, much of the blame has been assigned to political issues. This paper empirically tests for a causal and negative long-run relation between political instability and economic growth but finds no evidence of such a relationship. Sensitivity analysis indicates that there is a contemporaneous negative relationship but also that, in the long run and ignoring institutional factors, the group of African countries plays the determining role.
Why is it that couples who have a son or whose last child is a son earn higher conditional income? To solve this curious case we tell a detective story: evidence of a phenomenon to be explained, a parade of suspects, a process of elimination from the enquiry, and then the denouement. Given the draconian family planning policy and a common perception that there is strong son preference in rural China, we postulate two main hypotheses: income-based sex selection making it more likely that richer households have sons, and an incentive for households with sons to raise their income. Tests of each hypothesis are conducted. Taken as a whole, the tests cannot reject either hypothesis but they tend to favour the incentive hypothesis; and there is evidence in support of the channels through which the incentive effect might operate. To our knowledge, this is the first study to test these hypotheses against each other in rural China and more generally in developing countries.
Summary This paper is among the first to link the literatures on migration and on subjective well-being in developing countries. It poses the question: why do rural-urban migrant households settled in urban China have an average happiness score lower than rural households? Three basic hypotheses are examined: migrants had false expectations about their future urban conditions, or about their future urban aspirations, or about their future selves. Estimated happiness functions and decomposition analyses, based on a 2002 national household survey, indicate that certain features of migrant conditions make for unhappiness, and that their high aspirations in relation to achievement, influenced by their new reference groups, also make for unhappiness. Although the possibility of selection bias among migrants cannot be ruled out, it is apparently difficult for migrants to form unbiased expectations about life in a new and different world.
I. Gratification over advances of others: the tunnel effect introduced, 545. — II. Some evidence, 548.— III. Consequences for integration and revolution, 550.— IV. From gratification to indignation, 552.— V. The tunnel effect: social, historical, cultural, and institutional determinants of its strength, 553. —VI. An alternative reaction: apprehension over advances of others, 559.— VII.Concluding remarks, 560.— Mathematical appendix, 562.
This paper analyzes a newly assembled data set consisting of subjective indices of corruption, the amount of red tape, the efficiency of the judicial system, and various categories of political stability for a cross section of countries. Corruption is found to lower investment, thereby lowering economic growth. The results are robust to controlling for endogeneity by using an index of ethnolinguistic fractionalization as an instrument. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
China is not merely growing at double the rate of the European countries during the Industrial Revolution, it is also urbanising at double the speed. Using a unique dataset of rural-to-urban migrants in 15 major Chinese cities, we give preliminary answers to some of the most pressing policy questions: how many migrants are there and what are their attributes? Are they dissatisfied or are their kids doing worse than the kids of others? Are they discriminated on the labour market and, if so, what are the mechanisms via which this discrimination works and where are the market forces to undo the discrimination?
China's reform worked and produced one of the most impressive growth in the largest developing and transition economy in the world in the past twenty-two years. That China has managed to grow so rapidly despite the absence of many conventional institutions such as rule of law and secure private property rights is puzzling. To understand how reform works in a developing and transition economy that has great growth potential, it is not enough to study the conventional "best-practice institutions" as a desirable goal. One should also study how feasible, imperfect institutions have evolved to complement the initial conditions and to function as stepping stones in the transition toward the goal. Underlying China's reform is a serial of institutional changes concerning the market, firms, and the government in the novel form of "transitional institutions." These institutions succeed when they achieve two objectives at the same time: to improve economic efficiency by unleashing the standard forces of incentives and competition on the one hand, and to make the reform a win-win game and thus interest compatible for those in power on the other.
Summary Survey data from urban China in 2002 show levels of life satisfaction to have been low, but not exceptionally so, by international comparison. Many of the determinants of life satisfaction in urban China appear comparable to those for people in other countries. These include, inter alia, unemployment, income, marriage, sex, health, and age. Communist Party membership and political participation raised life satisfaction. People appeared fairly satisfied with economic growth and low inflation, and this contributed to their overall life satisfaction. There was dissatisfaction over pollution, but this--like job insecurity--does not appear to have impacted on life satisfaction.
This paper investigates the relationship between political instability and per capita GDP growth in a sample of 113 countries for the period 1950 through 1982. We define political instability as the propensity of a government collapse, and we estimate a model in which such a measure of political instability and economic growth are jointly determined. The main result of this paper is that in countries and time periods with a high propensity of government collapse, growth is significantly lower than otherwise. We also discuss the effects of different types of government changes on growth. Coauthors are Sule Ozler, Nouriel Roubini, and Phillip Swagel. Copyright 1996 by Kluwer Academic Publishers
This paper investigates the relationship between income distribution, democratic institutions, and growth. It does so by addressing three main issues: the properties and reliability of the income distribution data, the robustness of the reduced form relationship between income distribution and growth estimated so far, and the specific channels through which income distribution affects growth. The main conclusion in this regard is that there is strong empirical support for two types of explanations, linking income distribution to sociopolitical instability and to the education/fertility decision. A third channel, based on the interplay of borrowing constraints and investment in human capital, also seems to receive some support by the data, although it is probably the hardest to test with the existing data. By contrast, there appears to be less empirical support for explanations based on the effects of income distribution on fiscal policy. Copyright 1996 by Kluwer Academic Publishers
Both institutional quality and institutional stability have been argued to stimulate economic growth. But to improve institutional quality, a country must endure a period of institutional change, which implies at least a little and possibly a lot of institutional instability. We investigate the growth effects of institutional quality and instability, using the political risk index from the ICRG in a cross-country study of 132 countries, measuring instability as the coefficient of variation. Using the aggregate index, we find evidence that institutional quality is positively linked to growth. While institutional instability is negatively related to growth in the baseline case, there are indications that the effect can be positive in rich countries, suggesting that institutional reform is not necessarily costly even during a transition period. Sensitivity analysis, e.g., decomposing the political risk index by using both its constituting components and the results of a principal components analysis, using other measures of institutional quality and excluding outliers, confirm the general results, with qualifications.
Social capital is considered to play an economic role in labour markets. It may be particularly pertinent in one that is in transition from an administered to a market-oriented system. One factor that may determine success in the underdeveloped Chinese labour market is thus "guanxi", the Chinese variant of social capital. With individual-level measures of social capital, we test for the role of "guanxi" using a dataset designed for this purpose, covering 7,500 urban workers and conducted in early 2000. The evidence is consistent with the basic hypothesis. Both measures of social capital - size of social network and Communist Party membership - have significant and substantial coefficients in the income functions. Social capital can have influence either in an administered system or in one subject to market forces. It appears to do so in both parts of the labour market. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 The European Bank for Reconstruction and Development.
We present evidence that measures of "social cohesion," such as income inequality and ethnic fractionalization, endogenously determine institutional quality, which in turn causally determines growth. Copyright 2006 Blackwell Publishing Ltd.
How does political instability affect growth? IMF working paper WP
- A Aisen
- F J Veiga
Aisen, A., & Veiga, F. J. (2011). How does political instability affect growth? IMF working paper WP/11/12, January, 1–28.
A decade of change: The workers' movement in China Research report (Hong Kong, www.clb.org.hk) Greed and grievance in civil war
- P Collier
- A Hoeffler
China Labour Bulletin (2012). A decade of change: The workers' movement in China 2000–2010. Research report (Hong Kong, www.clb.org.hk) Collier, P., & Hoeffler, A. (2004). Greed and grievance in civil war. Oxford Economic Papers, 56(4), 563–595.
Social instability in China: Causes, consequences, and implications. csis.org/files/media Growth, income distribution and democracy: What the data say
- C Minzner
- R Perotti
Minzner, C. (2005). Social instability in China: Causes, consequences, and implications. csis.org/files/media/csis/events/061205_minzner_abstract.pdf Perotti, R. (1996). Growth, income distribution and democracy: What the data say. Journal of Economic Growth, 1, 149–187.
China: Fragile superpower: How China's internal politics could derail its peaceful rise
- S L Shirk
Shirk, S. L. (2008). China: Fragile superpower: How China's internal politics could derail its peaceful rise. Oxford and New York: Oxford University Press.
Corruption in China: Crisis or constant?, background paper for China balance sheet project
- A Wedeman
Wedeman, A. (2008). Corruption in China: Crisis or constant?, background paper for China balance sheet project. Washington DC: Peterson Institute for International Economics.
A decade of change: The workers' movement in China 2000–2010
- China Labour Bulletin
Social cohesion, institutions and growth
- Easterly