AuthorAbstractThis paper argues that China's size was one reason behind its relative decline in the nineteenth century. A ruler governing a large country faces severe agency problems. Given his monitoring difficulties, his agents have strong incentives to extort the taxpayers. This forces him to keep taxes low to prevent revolts. Economic expansion could aggravate corruption and cause further fiscal weakening. To support the model's predictions, I show that the Chinese state taxed and administered sparingly, especially in regions far from Beijing. Furthermore, its fiscal capacity contracted steadily during the prosperous eighteenth century, sowing the seeds for the nineteenth-century crises. Show
Suggested Citation Handle: RePEc:eee:exehis:v:54:y:2014:i:c:p:107-127 Download full text from publisherAs the access to this document is restricted, you may want to search for a different version of it. References listed on IDEAS
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What was the principal agent of industrial development in the late 19th century?
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