War, Bureaucracy, and State Capacity: Evidence from ... · from Imperial China Peng Peng November...

War, Bureaucracy, and State Capacity: Evidence

from Imperial China

Peng Peng

November 12, 2018

Abstract

Warfare has been at the center of the analysis of state building. This

paper explains why provisional financial strategy, driven by fiscal needs of

warfare, impairs state capacity through undermining bureaucratic recruitment

process. I exploit an original dataset between 1644 and 1911 in the Imperial

China to provide empirical evidence that officials who entered the bureaucracy

by purchase were less intrinsically motivated and less capable of mobilizing

resources when managing crisis. This focus on bureaucracy as a pillar of state

capacity provides an alternative pathway to effective state building, adding

to the bellicist theory derived from the history of Western Europe.

1 Introduction

Tilly (1992) famously argues that “states made wars, war made states.” However,

China did not experience state development as occurred in Western Europe, despite

extensive exposure to conflicts. This is even more puzzling, considering China’s head

start on building an effective state. In 221 BCE, China’s first unitary state, the Qin,

abolished national feudal titles; appointed national officials to local jurisdictions;

standardized the currency, measures and weights; established a uniform written

language; and centralized the tax system. By contrast, l’Academie francaise was

only created in 1635 and early censuses were conducted by the Church and not the

state in Western Europe.

In this paper, I introduce and provide evidence for a mechanism through which fiscal

needs driven by warfare directly weaken state capacity: the recruitment process for

1

bureaucracy. State capacity is defined as a state’s ability to implement its goals

(Mann, 2012). Local administrators are the on-the-ground implementers of state

policy, so their motivation and ability have impacts on the actual implementation

of government policy. If rulers compromise merit-based bureaucratic recruitment

for provisional financial relief, a deterioration of state capacity follows because these

administrators are less intrinsically motivated and less capable. In the bellicist

theory, an effective bureaucratic apparatus is often assumed. A few works that relate

to bureaucracy use size as an indicator of its strength (Brewer, 2002; Garfias, 2018).

This is problematic because a bulky government is likely to be inefficient, weak, and

characterized by patronage. In sum, bureaucracy may not enhance state capacity,

conditional on the officials who constitute it. The current literature on state capacity

focus mainly on the political side of the state, for example, representative institutions

and electoral systems (Mares and Queralt, 2015; North and Weingast, 1989). Fewer

work consider bureaucratic characteristics as determinants of state capacity. My

work intends to fill the gap.

This argument is particularly relevant to developing countries in which broadening

tax bases entails prohibitively high political and economic costs and government is

inflicted with financial difficulty. Imperial China provides a suitable case to test

this relationship because of two characteristics. First, Imperial China was an agri-

cultural economy. By understanding the institutional consequences of its rulers’

financial strategies, we can gain a deeper understanding of the political and eco-

nomic constraints of state building under which underdeveloped economies operate.

Second, its bureaucratic selection was highly routinized and merit-based, allowing

me to test the effects of recruitment procedures on state capacity. I analyze data

from a unique dataset I create for Imperial China between 1644 and 1911, and show

that officials who entered the administration by purchasing their offices weakened

state capacity. I also show two key mechanisms by which this occurred, namely,

they were more likely to over-extract and less able to mobilize resources from local

elites during crisis management.

This paper makes three contributions. First, I contribute to the discussion of bureau-

cracy and state capacity. The existing literature mostly focuses on fiscal capacity

(Beramendi et al., 2018; Queralt, 2018; Dincecco et al., 2011). Bureaucracy, espe-

cially local administration, as I show, is an important pillar of state capacity, but

lacks systematic discussion. Second, my work sheds light on the linkage between

irregular public revenues and state capacity. While it is politically expedient for

rulers in developing countries to obtain revenues through sale of offices, this strat-

egy undermines state building in the long run. Scholars studying export-oriented

economies and rentier states have pointed out that over-reliance on abundant natural

2

resources, in particular, petroleum, makes rulers lose the inventive to invest in both

extractive capacity and bureaucratic capacity because revenues are too easily ob-

tained with the help of a small, specialized bureaucracy (Chaudhry, 1989). Foreign

aid and external borrowing also elicit moral hazard: states spend the easy money

without broadening the tax base and strengthening the bureaucracy (Brautigam

and Knack, 2004; Queralt, 2018). My argument is similar in logic to these scenar-

ios: a windfall of money may help rulers avoid politically difficult bargaining, but it

arrests state capacity. I differ from this literature by proposing and providing em-

pirical support for how irregular public revenues impair the recruitment procedures

for local administration directly. Third, this paper contributes to the discussion of

Great Divergence (Pomeranz, 2009; Rosenthal and Wong, 2011) and state develop-

ment in China. We know relatively more about state development or lack thereof in

Africa and Latin America (Herbst, 2014; Boone, 2003; Centeno, 2002; Bates, 2014,

2015). By contrast, less work has been done on the development and atrophy of

state organizations in China, which has a long history of meritocratic bureaucracy.

2 Argument

In this section, I first review the bellicist theory of state building and its limited

explanatory power in Africa and Latin America. I then emphasize a key feature

of the theory, namely, the linkage between revenue strategy and domestic institu-

tions. Finally, I argue that when rulers compromise a meritocratic bureaucratic

recruitment for provisional fiscal relief, state capacity weakens. Non merit-recruited

bureaucrats are inherently driven to maximize their own private interests at the ex-

pense of public good; they are also less skilled at mobilizing resources to implement

policies designed by the political center to improve state capacity.

2.1 The Bellicist Theory of State Building and Its Limited

Explanatory Power

The bellicist theory has many variants but its main content can be summarized as

follows. In a context of continual threats of interstate warfare, the state needs to

raise sufficient material resources to compete militarily. This revenue imperative

compels rulers to invest heavily in building state institutions and, in particular, tax

institutions. Tax institutions are instrumental to rulers because they can create

reliable records of taxpayers, their economic activities, and their assets (Tilly, 1992;

3

Dincecco, 2011) and thereby provide rulers with a more reliable source of revenue.

In exchange for tax revenues, rulers agree to establish representative institutions

that cede powers to taxpayers (Stasavage, 2016, 2010; Dincecco, 2011). An effective

state is thereby established, a state that is able to secure a broad taxation base

and large-scale borrowing in private markets (Dincecco, 2011; North and Weingast,

1989). This story of state making obtained its inspiration from Western European

history, especially the history of England and the Netherlands where pre-existing

representative institutions provided the organizational infrastructure for tax bar-

gaining.

However, the bellicist theory has been found of limited use and explanatory power

in other regions. Geography and the character of warfare have been singled out

as the primary reasons for why other regions did not experience similar state de-

velopment. Despite frequent conflicts, political disorder still pervades Africa and

Latin America (Herbst, 2014; Centeno, 2002). States are unable to monopolize the

legitimate use of violence, the basic function of the state as defined by Max Weber.

Herbst (2014) explains the prevalence of weak states in Africa by pointing to its

geography. Africa’s barren and arid soil lowered the potential gains of fighting terri-

torial wars; consequently, African rulers fought wars to plunder labor and animals,

but not to establish effective territorial control with permanent state organizations.

In the case of Latin America, Centeno (2002) emphasizes the character of warfare,

arguing that only external wars amount to severe threats to rulers, and internal

wars in Latin America merely divided elites and slowed down the development of

political authority.

Unlike Africa and Latin America, state institutions developed very early in China.

As the first Chinese state, the Qin laid the groundwork for a centralized tax and

bureaucratic system (Hui, 2005). Figure 1 shows the territory of the Qin state

and the comparison with present-day China.1 Its control stretched all the way to

Mongolia in the north and Northern Vietnam in the south. These state institutions,

however, did not give China a head start. As in Africa and Latin America, the

Chinese state did not become effective, taxing on a broad base and regulating social

and economic activities. Dincecco and Wang (2017) point to the differences in

political geography between China and Europe. They argue that China’s sheer

size made external warfare less frequent, whereas the high level of fragmentation

of Western Europe after the fall of the Carolingian Empire made it more prone to

external warfare. This view echos the research of Stasavage (2010), who argues that

the small size of European polities lowered transaction costs of establishing and

1The maps come from https://www.travelchinaguide.com/intro/history/qin/qin-dynasty-map.htm

4

maintaining representative institutions.

[Figure 1 about here.]

Certainly, geography and the character of warfare are important external factors in

shaping state institutions. My theoretical approach differs from the above arguments

by focusing on domestic institutions as a determinant of state capacity. Figure 2

shows that wars occurred on a frequent basis in Imperial China from 1650 to 1900.2


The key and often overlooked feature of the bellicist theory is the linkage between fis-

cal strategy and domestic institutions. Establishing a professionalized tax agency is

not globally optimal. Customs, excise, land tax, external borrowing, domestic credit,

export tax, sales of office, and even plundering are all possible revenue strategies,

producing different institutional consequences. State building in Western Europe

was preceded by the growth of Atlantic trade (Acemoglu et al., 2005) and a domes-

tic credit market (North and Weingast, 1989), providing necessary conditions for

collecting commercial taxes (?). The institutional consequence was power-sharing

institutions that ceded power to tax payers (North and Weingast, 1989; Dincecco,

2011). Queralt (2018) points out that external borrowing weakens state capacity

because the possibility of renegotiating or repudiating loans weakens incentives to

invest in state capacity. Alternatively, a ruler may reap benefits from oil production

or foreign aid (Chaudhry, 1989; Brautigam and Knack, 2004). Chaudhry (1989)

finds that in Saudi Arabia, oil revenues transformed the function of bureaucracy

from collecting broad-based taxes to redistributing wealth gained from exporting oil

(Chaudhry, 1989). Brautigam and Knack (2004) make a case for how foreign aid

produces moral hazard. Political elites have weak incentives to change a situation in

which large amounts of aid provide exceptional resources for patronage and fringe

benefits. In its extreme version, governments allow corruption in tax departments

or an ineffective internal revenue service to continue. Government annual accounts

look deceptively healthy but state capacity is weakened.

When the main source of government income is agricultural taxes, as in Imperial

China and the French ancien regime (Kuhn, 1970; Morrisson and Snyder, 2000),

2I collect war data from Catalog of Historical Wars in China published by the Nanjing MilitaryAcademy (2003). This catalog contains dates, location, and leaders of conflicts that took placein China from approximately 1000 BCE to 1820 BCE. The Catalog derives this information fromChinese official historical books, known as the Twenty-Four Histories.

5

a cost-effective way to raise revenue is to simply sell offices. Increasing taxes on

the agricultural population does not yield high profits for rulers because harvests in

preindustrial societies were highly volatile and highly dependent on natural factors

like rainfall and sunlight. At the same time, public offices were the most important

source of social prestige. This is my point of departure: Chinese emperors used

sale of offices as their financial instrument when pressed by conflicts, which is com-

pletely different from broad-based taxes as in Western Europe. The institutional

consequence was a corrupt and inefficient bureaucracy. The relationship between

sale of offices, state capacity, and conflict is captured well by Feng Guifen, a Qing

scholar-official:

In the past ten years [1850s], sales of rank have been frequent, and civil

government has therefore been weakened. When civil government is

weakened, social ferment becomes critical; when social ferment becomes

critical, the public revenues are strained; when the public revenues are

strained, there is increased sale of rank. This is the way in which one

rebellion leads to another. In discussion of present-day governance, I

consider the abolition of sale of rank to be the first principle.3

2.2 Bureaucratic Recruitment and Its Impacts on State Ca-

pacity

In this section, I present an argument that the process to select bureaucrats, as

driven by the financial needs of the ruler, has significant impact on the ability of

government to meet challenges.

The argument centers on two actors in an agricultural economy with a centralized

bureaucracy: a ruler and local officials. The ruler’s power emerges from military

dominance. The ruler strives to maximize his chances of survival, which is achieved

by investing in agricultural production. This set-up makes sense in an agricultural

economy as the ruler relies primarily on land tax to finance government expenditures.

At the same time, his chances of holding onto power are inverse to the likelihood

of peasant rebellions, which are usually fueled by heavy taxes. In such societies,

policies that increase state capacity are those that promote the state’s ability to

steer and promote agricultural production. Local officials are the other political

player. These administrators seek to maximize rents extracted from being in office,

3Feng Guifen, Jiaofenlu Kangyi (Protests from the Hut of Revision), 1897 edition (reprint,Taipei: Wen-hai Press) 1.17b-19a. Translated in Mary Wright, The Last Stand of Chinese Con-servatism, p. 85

6

chances of getting promoted, and fulfillment of intrinsic values. On the one hand,

they differ in their ability to implement policies made by the ruler, at the political

center. On the other hand, they engage in rent-seeking activities to varying degrees,

which is particularly prevalent if they are paid poorly. When material benefits

and intrinsic values are in conflict, we expect to see officials trade off self-interest

and public good, characterized by policies that promote the social welfare of the

local community. Officials who value their own economic interests would subvert

policies that are designed to increase state capacity because they are unwilling to

let go of the opportunity of extraction. A “virtuous” official, by contrast, is willing

to sacrifice the opportunity of extraction to national policies that are designed to

increase state capacity. When national policy and self-interest are not in conflict,

local administrators act to increase state capacity. But we should still be able to

observe variation in the extent to which the center’s policy is implemented as a result

of varying levels of competence of local officials. Facing the same social and political

constraints, a competent official is able to countervail these limiting factors on his

performance and push forward for greater state capacity. These limiting factors are

especially crucial when crisis occurs, imposing restraints on the available resources

an official can use. The major resource providers are local elites and the ruler at the

political center. Competence is thus reflected in one’s ability to get resources from

local elites and the political center.

This argument is closely related to selecting “good types” for both democratic and

authoritarian legislatures (Fearon, 1999; Chattopadhyay and Duflo, 2004; Manion,

2017). Bureaucracy is also about selecting good types, and only a bureaucracy

composed of “good types” can increase state capacity. As Besley (2005) argues,

the nature of the workings of government depends ultimately on the officials who

constitute it, among which honest and competent ones are the most desirable. Lo-

cal administrators are the actual implementers of national policy and, as such, a

critical determinant of state capacity. Yet, the internal workings of the state and

the individuals who provide basic public services have received less attention in the

study of state capacity.

In short, bureaucracy may or may not enhance state capacity, depending on its

composition. Local administration undercuts the ruler’s power when the selection

procedure is not effective in selecting self-motivated and competent officials. When

bureaucratic recruitment is merit-based, state capacity is strengthened because vir-

tuous and capable local administrators act in ways consistent with the ruler’s ob-

jective.

This characterization of local public administration helps explain why external in-

7

ducements like wars undermine state capacity in countries with low income but a

relatively routinized bureaucracy. Rulers can sell offices to raise revenue without

disturbing agricultural production. The institutional consequence of this irregular

public revenue strategy is that the bureaucratic selection fails to select “good types.”

Incompetent and less social-minded officials are selected into public offices, crippling

state organizations and bureaucratic performance. We observe this phenomenon in

the Ottoman Empire, the Chinese Empire, and pre-colonial Vietnam. The fates of

rulers in these regimes share a common feature: when local administration is merit-

based, their rule is stable; when the composition of local administration is disrupted

by external shocks like wars, their power is endangered.

Imperial China provides a highly suitable case to test this argument because of

its agricultural economy and political institutions. The Qing dynasty had a highly

centralized fiscal system featuring inter-provincial revenue sharing. The central state

was able to steer flows of revenues to provinces in fiscal need (Kaske, 2011). The

size of the Qing’s local administration changed hardly at all, as one can see from

Table 1. Its composition changed, however. In 1764, 73 percent of officials had

academic credentials; 22 percent had become local officials by purchase. In 1871,

officials by purchase had risen to 51 percent of local officialdom. That is, half of the

local administration was staffed with officials who had not taken the competitive

civil service exam. These changing patterns indicate that officials were more likely

to be selected based on their willingness and ability to pay, and less so on their

academic credentials or merit.

[Table 1 about here.]

Historically, we observe that sale of office as a revenue strategy does not necessarily

contribute to worsened state capacity. Under the French ancien regime, the sale of

offices increased social mobility because many of the buyers were from the middle

class, not aristocrats. Purchase of office may merely reflect career motivation. This

is probably the case when existing selection into public office is not based on merit

and purchasing office provides an alternative path toward political power. Guardado

(2018) looks at sale of offices in the Spanish Empire and its effects on long-term eco-

nomic development. She uses social status to proxy internal motivation and argues

that low-status officials were more likely to be involved in extraction. For my case, I

am able to separate motivation and competence, leveraging the institutional details

of the Imperial Chinese Civil Service Exam. Table 2 summarizes my argument and

the embedded mechanisms. I test empirically the relationship between bureaucratic

recruitment and state capacity in Sections 6 and 7 and the possible mechanisms in

8

Section 8.


3 Institutional Background

In this section, I review the relevant institutional details of the official recruitment

and appointment systems in the Qing dynasty.

The Chinese Imperial Civil Service Exam took shape and matured between 750

and 1250, interrupted by the Mongol conquest in the thirteenth century. It then

continued into late Imperial China until its abolition by the Qing emperor in 1905.

It was the major path to office. Its evaluation was almost exclusively based on merit,

measured by mastery of written classical literacy. Success in the civil service exam

was the sine qua non of social prestige in Imperial China because success rates were

extremely low (Zhang, 1955). Other channels of administrative recruitment also

existed, such as purchase and inheritance, but these paths were deemed ”irregular”

and, therefore, less prestigious (Zhang, 1955; Elman, 2000).

Figure 3 shows how competitive these exams were. The numbers in the brackets

indicate the success rates of advancing to the next higher level of exam. According

to Zhang Zhongli, a prominent Chinese historian, during the Qing dynasty approxi-

mately 2 million candidates sat for the entry-level licensing exams and 1.5% of them

(roughly 30,000) passed. About 1500 people passed the provincial exams, and about

300 people passed the metropolitan exams (Zhang, 1955).


The Civil Service exam was structured hierarchically. There were three levels of

exams altogether: prefectural, provincial, and metropolitan. Sometimes the em-

peror would supervise a palace test to select the best from those who had passed

the metropolitan exam, adding a fourth tier to the hierarchy of examinations. The

prefectural level was the licensing exam, in which county and prefectural schools

chose eligible candidates for the provincial examinations. These exams were super-

vised by prefectural officials and provincial educational commissioners. Students

were required to write two essays, one based on a passage from the The Four Books

and the other from the The Five Classics, both Confucian Classics containing the

9

core value and belief systems of Confucianism.4 Students’ exam papers were judged

on calligraphy, writing style, and content (Elman, 2000). Students who passed pre-

fectural exams were granted the title of gentry, and provided with state-sponsored

stipends paid in rice. Their family members were exempt from the labor corvee

and land tax. The average age of these licentiates was between 17 and 37 years old

(Zhang, 1955).

The contents of both provincial and metropolitan exams usually consisted of three

sections that tested the knowledge of candidates beyond the scope of moral teachings

of Confucianism. Table 3 shows an example of the exam content. Table 4 demon-

strates the wide range of topics covered in policy questions. In the policy section,

students were tested on their knowledge of selection of officials, cultivating talent,

the economy, history, local governance, agriculture, and defense.(Elman, 2000). We

can thus infer from the recruitment process that candidates who passed the civil

service exams were not only relatively very immersed in Confucian moral teachings

but also relatively competent because they had higher levels of literacy, numeracy,

and understanding of local administration, the economy, and the legal system.



Ample historical evidence verifies that the selection process was fair and relatively

free of corruption. Exam cheaters were expelled and punished by a ban on taking

subsequent exams. The center hired a large number of copyists to recopy all the

exam papers and assigned them secret codes in case the exam graders recognized

the writing. If a student bribed a grader with more than 80 ounces of silver, both

faced the death penalty (Elman, 2000).

The local government consisted of three levels of administration: province, prefecture

and county. The prefect was the executive head at the prefectural level and my data

were collected at this level. A prefect was responsible for tax collection, maintaining

social order, adjudicating legal cases, and providing public goods, such as famine

4The Four Books were selected by Zhu Xi in the Song dynasty to serve as a general introductionto Confucian thought. Five Classics are the the Book of Poetry, the Book of Documents, the Bookof Change, and the Book of Annals. The Book of Poetry is a collection of 305 poems. The Bookof Documents is a collection of documents and speeches of rulers and officials. The Book of Ritesdescribes ancient rites and court ceremonies. The Book of Change contains a Chinese divinationsystem of I-Ching. The Book of Annals is a historical record of the Confucius’s state during 722-481BC.

10

relief and granaries (Qu, 1969). Overall, there were 267 prefectures in total. This is

also the level of administration that I analyze.

The term “office selling” is actually a simplification (Kaske, 2011) because the Im-

perial Chinese state rarely sold offices blatantly. Instead it sold honorific titles and

academic degrees as qualifications to become officials. Both purchasers and exam

takers were organized into cohorts based on the years they registered and were

appointed to fill vacancies of official posts in local government by the Ministry of

Personnel (Xu, 1974).5 In the early Qing dynasty, the state had a lottery system

of appointment to avoid corruption. Prospective officials drew lottery every month

when a local post was vacant. In 1723, Emperor Yongzheng permitted provincial

governors to appoint capable prefects and magistrates to regions with high crime

rates and delayed tax payments, as a response to varying local conditions. The

majority of the posts were still appointed by the lottery system (Zhang, 2011). The

Qing government also stipulated a rule of avoidance that forbade officials to hold

office in their native or neighboring provinces and banned their clan members and

maternal relatives from serving in the same province (Qu, 1969).

To summarize, the bureaucratic recruitment was meritocratic and competitive and

the appointment system was centralized and well-organized. The avoidance law

suggested that officials could not use his family and lineage to influence resource

allocation during crisis management. The lottery appointment system also gave me

some leverage when addressing the strategic appointment of local officials.

4 Measuring State Capacity

Measuring state capacity is considered a thorny issue in political science research

(Hendrix, 2010). Scholars have used various measures, for example, aggregate tax

revenue, tax revenue/GDP ratio, income tax/GDP ratio, size of bureaucracy, and

size of military budget (Queralt, 2018; Beramendi et al., 2018; Garfias, 2018). Ana-

lytically, these measures cannot separate a state’s policy preferences from its ability

to implement policy. For example, a high tax revenue/GDP ratio not only reflects

a state’s ability to extract from society but also captures its preferences for welfare

spending or outright extraction. Moreover, these measures are highly correlated with

regime type, which makes it impossible to tease out the mechanisms linking state

capacity and other variables of interest. Instead, I use the historical data on disas-

5The Qing central government consisted of six ministries: the Ministry of Personnel, the Min-istry of Rites, the Ministry of War, the Ministry of Revenue, the Ministry of Justice, the Ministryof Public Works

11

ter relief in Imperial China to measure state capacity, which is an output measure

capturing the state’s ability to meet challenges during disasters. This is a minimal-

ist approach to capture the core function of state, or infrastructural power (Mann,

2012). The data come from Collections on Economic History from the Veritable

Records of the Qing.

This measure has several advantages. First, it is analytically separate from how

policy priorities are chosen and thus allows me to inquire into causal mechanisms.

Unlike tax/GDP ratio that captures both the willingness and capacity of the state

to implement its goals, relieving the famine-stricken population from famine was

consistently of the highest priority to the Chinese emperors. On the one hand,

the empire was primarily reliant on agricultural taxation for public revenues. On

the other, famine often led to social unrest and rebellion (Kuhn, 1970; Li, 2007).

Disasters like droughts and floods could easily displace millions of people, creating

a fertile ground for social unrest as population movement became rampant and loss

of homes and property became widespread. In 1813, for example, an extremely

serious drought hit Zhili (today’s Beijing and Hebei province) and quickly extended

to Henan and Shandong provinces. Henan and Shandong provinces were unable to

provide relief grain, leading to a peasant rebellion later that year (Li, 2007). This

phenomenon is not distinct to China: rulers of agricultural countries everywhere

consider famine relief as their highest priority because of its impact on tax revenues

and social order. The persistence of chronic hunger in Sub-Saharan Africa is an

indication of low state capacity (Baro and Deubel, 2006).

Second, the measure accurately captures the theoretical construct of interest, state

capacity. The Imperial Chinese state stipulated a comprehensive famine relief plan

at the national level, but the extent to which this plan was carried out was decided

by local administration, which is exactly the concept of infrastructural power (Mann,

2012). The goal of the famine relief plan was to restore agricultural production as

quickly as possible, by sending displaced farmers back to their homes. The plan

consists of the four following steps. First, the official investigates to ascertain the

severity of the disaster and classifies it on a 10-point scale, with 10 the most severe

and disasters rated below 5 in no need of relief efforts. Second, the official classifies

local households by degree of need and distributes extra cash and grain to those

in need. Third, the official sets up distribution centers to supply food to refugees,

with the grain provided from inter-regional transport by the central state, personal

donations of officials, and contributions of local gentry. Finally, the official permits

sale of grain at below-market prices (Li, 2007). Local administrative leadership was

clearly critical to this plan because all four steps require coordination of personnel

and resources. In reality, an official might cut steps either because of unwillingness to

12

spend energy on disaster relief or because of an inability to mobilize needed resources

from the central state or local gentry. For example, an official could underrate the

severity of disasters so as to avoid the obligation to organize famine relief. He could

also bypass the household investigation and only set up grain distribution centers

for refugees. All the famine relief steps from distributing extra grain and cash to

allowing sale of grain at low prices are documented in the data source Collections

on Economic History from the Veritable Records of the Qing.

5 Data on Bureaucratic Recruitment

To measure my independent variable, bureaucratic recruitment, I construct an orig-

inal dataset of bureaucracy in the Qing dynasty (1644-1911). Using all the data,

I code how the prefect entered the bureaucracy (i.e., by exam or by purchase), his

surname, his ethnicity (Han-Chinese or Manchu), and his place of birth. Qing China

comprised 267 prefectures in total. I analyze a simple random sample of 50 prefec-

tures. The explanatory variable of key theoretical interest is an indicator variable

reflecting whether or not a prefect became an official by purchase, which takes the

value of 1 if the official entered bureaucracy by purchase and 0 otherwise.

The data on bureaucrats come from Chinese local gazetteers that have been digi-

tized, which are all in classical Chinese. Local gazetteers of Imperial China were

compiled by members of the local elite and were produced under the sponsorship of

local officials. They contain copious materials on local administration, the economy,

and society, handed down from generation to generation. Figure 4 shows an example

of the original gazetteers.


I first check provincial gazetteers, which normally contain detailed administration

information for their respective prefectures from the Qin dynasty to the Qing dy-

nasty. I use the information on Qing administration. In cases of missing information

on an individual official’s background, I turn to the relevant prefectural gazetteers6.

Table 11 in Appendix A presents summary statistics of my data.

6To improve data quality, I check gazetteers of the prefecture where the bureaucrat served hisoffice and the prefecture where he was born. In Imperial China, holding public office and passingCivil Service Exam were highly respected and local gazetteers documented students who passedImperial Civil Service Exams.

13

6 Empirical Strategy and Results

My primary objective in this section is to investigate whether bureaucratic recruit-

ment affects state capacity. I have conjectured that we should expect officials who

enter public office by purchase to be associated with lower state capacity.

Before turning to estimation results, I present some descriptive statistics on the

relationship between bureaucratic recruitment and famine relief in Figures 5 to 7.

Figure 5 reports the total number of famine relief efforts conducted by officials by

purchase and officials by exam from 1662 to 1820. I also calculate the simple moving

averages (SMA) of total number of famine relief efforts conducted by both types in

Figure 6 and the per person number of famine relief efforts in Figure 7.7 All three

figures demonstrate a consistent pattern: officials by purchase delivered fewer famine

relief efforts. Obviously, the descriptive statistics do not control for other variables.

nor are the statistics broken down by locality.




I now turn to the estimation strategy. I estimate the relationship between bureau-

cratic quality and state capacity as follows:

Reliefit = α + βpurchaseit + γdisasterit + θpurchaseit ∗ disasterit + λXit + εit.

In this equation, Reliefit, the number of famine relief efforts, is estimated as a linear

function of the following variables taken in prefecture i and year t. Purchaseit is

equal to 1 if the prefect entered public administration by purchase. Disasterit is

equal to 1 if either a drought or a flood happened.8 Xit is a vector of individual-

level and prefectural controls, which include an official’s ethnicity and a dummy that

7The moving averages allow me to look at smoothed data rather than focusing on the volatilefluctuations that are inherent in all disaster data.

8The data come from The Yearly Charts of Dryness/Wetness in China for the Last 500 Yearspublished by the China Meteorological Society. To be sure, this measure is not ideal: the modelsshould take into account duration and severity of disasters. Yet, in a premodern agriculturalsociety, disasters usually lasted for months, so the official document only records whether or not adisaster occurred in a particular year, including both flood and drought.

14

registers whether he was newly appointed. The estimator θ captures the difference

between officials by exam and officials by purchase in exerting famine relief efforts,

conditional on the disaster occurrence. In all models below, I use province and

year fixed effects to account for time-varying trends and underlying characteristics

of provinces. Indeed, historical documents suggest that officials in the late Qing

dynasty were more corrupt and less capable than those who served in the earlier

period (Wakeman, 1977). Famine relief efforts were also likely to be coordinated at

the province level (Li, 2007). I use robust standard errors in all models to account

for heteroskedasticity. In Appendix B.4, I reestimate the models using clustered

standard errors with prefecture fixed effects.

As a next step, Table 5 reports OLS estimates of famine relief efforts with different

model specifications. The coefficient on the interaction term is consistently negative

and statistically significant. In Column 1, an official by purchase is associated

with 0.278 fewer famine relief efforts when disaster occurs. Specifications 2 to 4

take individual characteristics into consideration. Manchu is an indicator variable

that is equal to 1 if the official belonged to the Manchu ethnicity and 0 otherwise.

The rulers of the Qing dynasty were Manchus, a minority ethnic group that came

from Manchuria, today’s Northeastern China. In 1644 and 1645, they defeated the

Ming Dynasty and came to rule China. Han Chinese officials were more adept

at administration than were their Manchu counterparts. However, in the early

decades, the Imperial Civil Service Exam allocated higher per capita quotas to

Manchus although they were less educated.9 Omitting this variable may cause an

over-estimation of the coefficient on purchase in magnitude because worse state

capacity could be a result of incompetence associated with ethnic favoritism rather

than bureaucratic selection. The coefficient on Manchu is negative, indicating fewer

famine efforts conducted by Manchu prefects. The second individual control is

newly appointed, which takes the value of 1 if the official was newly appointed to the

prefecture and 0 otherwise. Political scientists find that locally-embedded officials

provide more public goods because they are either more informed or held accountable

informally by the local community (Tsai, 2007; Bhavnani and Lee, 2018; Manion,

2006). By this logic, a newly appointed official may conduct fewer famine relief

efforts because he lacks local information and resources. The coefficient on newly

appointed is not statistically significant. The time frame of this dataset is between

1644 and 1911, and I have less missing information on officials between 1662 and

9One caveat to the coding of Manchu is that I coded anyone who belonged to Eight Banners asManchu. Eight Banners were administrative and military divisions under the Qing dynasty intowhich all Manchu households were placed. But Manchu rulers rewarded Bannermen identity to HanChinese before the Manchus conquered China and later Eight Banners also absorbed Mongolians.So a Manchu person can be ethnically Mongolian or Han Chinese, but they have long acculturatedto Manchu culture and enjoyed political privileges (Elman, 2000).

15

1820, as shown in Figure 11 in Appendix A. I rerun the regression model including

a full set of individual-level controls using observations between 1662 and 1820 in

Column 4. In this restricted model, an official by purchase is associated with 0.303

fewer famine relief efforts when an disaster occurs.


In summary, in this section I have presented two types of evidence to suggest that

officials by exam conduct more famine relief efforts than do officials by purchase.

First, simple descriptive statistics in Figures 5 and 6 are suggestive of this pattern.

Second, in Table 5, statistical models that include controls for year-specific shocks

and province-specific characteristics show evidence of the negative impact of low

administrative quality on state capacity.

7 Alternative Explanations

The estimation results reported in Section 6 control for unobserved time trends and

unobserved heterogeneity at the province level. Nonetheless, there remain several

reasons why we might still be cautious about the interpretation. In this section, I

consider some alternative explanations for variations in state capacity: (1) trans-

portation and commercialization, (2) Western colonial influence, (3) information

costs, and (4) selection bias.10

7.1 Income, Transportation, and Geography

To begin with, only areas with a certain level of productivity in agriculture can

sustain large urban centers and a dense population. Higher economic productivity

could lead to higher state capacity, and population is usually used as a proxy for

wealth in preindustrial society (Acemoglu et al., 2002). More populous areas may

have a stronger state presence and broader state functions. In Column 1 of Table 6,

I add population and size to the regression model. Both have positive impacts on

famine relief efforts.


10I address potential measurement errors of my dependent variable including whether it reflectsextraction and whether early state investment lowers the probability of disaster occurring in Ap-pendix B.

16

Second, proximity to a transportation network reduces the transaction costs of the

state’s presence in society (Acemoglu et al., 2015). In my case, this is particularly

important given that the Qing state relied on the Grand Canal to transport tribute

grain to supply the capital with staple food and ship it to provinces in need. The

canal linked Yantze river and other major rivers with Beijing (see Figure 8) (Li,

2007; Pierre-Etienne, 1990). Prefectures with better access to the coast and rivers

may thus have more famine relief efforts. I therefore include two variables coastal

city and access to main river. Both of them are indicators that take the value of 1

if the prefecture was either a coastal city or had access to a major river in China.

Transportation clearly has a positive effect on the state’s ability to mobilize and

coordinate resources during natural disasters. Having access to the sea or major

rivers is associated with approximately 0.3 times more famine relief efforts.


Third, geography may still bias my estimates. Suppose that the emperor prioritizes

rice-growing provinces over others when he distributes limited resources because rice

is one of the most important tribute grains to the center. At the same time, thanks

to the suitable weather and climatic conditions, the grain storage in public granaries

should be higher, giving local officials more grain to distribute during disasters. I

include a variable rice suitability to proxy for agricultural productivity. The variable

takes a value from 1 to 5, with 5 indicating the highest agricultural suitability for

growing rice. The data come from Food and Agriculture Organization of the United

Nations. The coefficient on rice suitability is statistically significant and positive

in Columns 5 to 8, implying that agriculturally suitable prefectures witnessed more

famine relief efforts. I also include a variable terrain ruggedness to indicate the

terrain ruggedness of a prefecture, which is highly correlated with famine relief

efforts, as shown in Columns 6 to 8. The coefficient on purchase*disaster remains

significant.

7.2 Western Influence

State building outside Western Europe is very likely to be influenced by colonial

powers. Colonial settlers open up trade ports and invest in legal and physical in-

frastructure that yields profits (Boone, 2003; Ali et al., 2015; Dell et al., 2017). This

is particularly relevant in my case as Western presence in some Chinese cities was

strong. 1840 was a turning point for the Qing Empire because in this year, the

17

British engaged the Qing in the First Opium War and thus opened China to West-

ern influence (Wakeman, 1977). In 1842, the Qing was forced to sign the Treaty

of Nanking, which granted indemnity and extraterritoriality to Britain, opened five

treaty ports to foreign merchants, and ceded Hong Kong to the British Empire.

Other Western countries followed the British in establishing treaty ports in China.

Figure 9 maps the locations of treaty ports in China between 1840 and 1920. Most of

them were concentrated on the coast and alongside Yangtze River but some were in

Tibet and Yunnan, bordering British India and French Indochina. In treaty ports,

Westerners were allowed to establish hospitals and churches and even have their own

police forces. Western organizations may have become de facto providers of public

goods, a substitute for local government. Foreign workers were documented to dis-

tribute relief and raise contributions (Li, 2007). I include an indicator variable treaty

post that takes the value of 1 if the prefecture was a treaty port and 0 otherwise.

The coefficient on treaty port is not statistically significant in Columns 7 and 8 of

Table 6, suggesting that the Qing state was still the major provider of famine relief

during natural disasters. The coefficient on purchase*disaster remains robust.


7.3 Information Costs

Monitoring bureaucrats in democracies is costly (Przeworski et al., 1999). It is even

more so in authoritarian regimes (Manion, 2015). Stasavage (2010) argues that

distance determines the transaction cost of establishing representative institutions.

In a similar vein, one may argue that the number of disaster relief efforts may be

lower in places far away from the capital in Imperial China because the Emperor

had higher costs of monitoring. As a result, local administrators might shirk their

responsibilities. To account for this explanation, I first retrieve the latitude and

longitude of each prefecture and then calculate the distance between a prefecture

and the capital, Beijing, measured in kilometers. As shown in Table 7, distance has a

negative impact on local state capacity and the coefficient is statistically significant

throughout all columns. A one kilometer increase in distance from a prefecture

to Beijing is associated with 0.001 fewer famine relief efforts, and the coefficient

purchase*disaster remains robust in Table 7.


18

7.4 Selection Bias

The strategic thinking of rulers in the appointment system may also impose a threat

to the validity of inference. If the ruler’s goal is to maximize his chances of political

survival, then he is very likely to appoint officials with competence to regions that

are strategically important. Table 12 in Appendix B shows the t-test of the group

means on a range of variables that may enter into the ruler’s strategic appointment.

An official by purchase was not more likely to be appointed to prefectures that

were far away from the capital or to prefectures that were more likely to experience

peasant revolts. But an official by purchase was more likely to be appointed to a

prefecture with higher rice suitability. This might be a function of my sub-sample.

As this is the case, then my estimates are underestimated because the ruler should be

more willing to support agriculturally suitable prefectures during disasters. Table 13

shows that the previous disaster records cannot predict whether a prefecture had an

official by purchase, implying that emperors were not more likely to appoint officials

by purchase to prefectures that were disaster-prone.

8 Mechanisms

Having established the link between sale of office and state capacity, I proceed to

understand the underlying mechanisms. The Civil Service Exam was able to select

officials who were more skilled because of the institutional design. Candidates were

rigorously tested on their knowledge of the economy, geography, legal codes, and

politics. Based on the main players of disaster relief, namely, the central state,

local elites, and local administration, I lay out four possible mechanisms. The

first is the role of central-local connections : officials by exam were more active and

effective in “lobbying” for policies in favor of their jurisdiction, leading to better local

state capacity. The second mechanism is social mobilization: the social prestige

associated with passing the Imperial Civil Service Exam reduced the transaction

costs of bargaining with local elites when officials demanded local resources during

disasters. The third mechanism is intrinsic motivation: officials who gained office by

exam harbored a stronger sense of public virtue, and therefore exerted more effort

in famine relief. Finally, the emperor may have perceived officials by exam as more

loyal and therefore diverted more resources to them during disasters.

19

8.1 Mobilization of Central Resources

Mobilizing resources is a key component of competence. Resource mobilization is a

process of obtaining resources from resource providers, to implement pre-determined

goals. I expect a competent local official to be better able to obtain financial and

personnel support from the central state in a timely manner. The standard proce-

dure was that a local official delivered written requests to his superiors and ministries

asking for financial help. This kind of request had to be substantiated with rigorous

computation and household investigation. An official had to be precise about the

severity of disaster and how much grain relief was needed. Only when a request was

considered as legitimate would interregional transport of grain be granted. During

the process of conducting comprehensive surveys, investigating household needs,

computing the needed financial help, and writing requests, high levels of classical

literacy, numeracy, and communication skills were essential. These skills were criti-

cal given that the Qing’s fiscal system was highly centralized and local government

was strained by a tight budget all the time (Zelin, 1992). Local government had no

choice but to rely on an inter-regional transport system that required massive di-

version of grain supplies from tribute grains, and circulation of grain was facilitated

through canals and public granaries, both sanctioned by the state so a poor harvest

in one region could be offset by a good one from another.

I create an interaction term official*purchase to test officials’ differential ability to

mobilize resources from the central state when disaster occurs, conditional on the

prefecture’s connection with the political center in Table 8.A. Here, official is the

number of officials born in prefecture i who achieved higher than or equal to the level

of a vice-provincial governor in the administration. The data come from ?. Ninety

percent of these 4,200 high-level officials passed the metropolitan exams. The co-

efficient on the interaction term is not statistically significant, providing suggestive

evidence that the fiscal transfer system was still centralized and “decentralized lob-

bying” for inter-regional transport grain may not have played a key role in famine

relief in the Qing dynasty. But it does not rule out the role of other forms of politi-

cal connections, for example local favoritism and factions, in determining local state

capacity.


20

8.2 Social Mobilization

As explained in Section 2, an official’s competence is also embodied in his ability

to mobilize local financial and personnel resources. Because of the social prestige

associated with the Civil Service Exam, officials by exam were more respected by

the local community. During normal times, they demonstrated a greater amount

of knowledge and a higher level of effort regarding governance to the benefit of the

local community. This clear sense of commitment was the source of effective resource

mobilization during crisis. Local elites may assume that both they and officials were

working hard for the success of the common enterprise, i.e., combating disaster and

recovering agricultural production, therefore they may be more willing to invest in

local state capacity. By contrast, localities governed by officials by purchase may

be trapped in a sub-optimal equilibrium. Not trusting officials by purchase, local

elites may be less willing to cooperate with local administration during disasters

to guard against corrupt behavior. In the context of Imperial China, local elites

and officials by exam were both academic degree holders, sharing social values and

political prestige. For these two reasons, I expect the two types of bureaucrats to

have differential abilities to utilize resources from local elites during disasters.

To test this mechanism, I use a variable quota to proxy for the strength of local

elites in a prefecture. These data come from ?. In the Chinese Civil Service exam,

the numbers of successful candidates at each exam level were controlled by a quota

system, with quotas for the prefectural examination assigned at the prefecture level.

As explained above, only candidates who passed the prefecture-level exam were

granted the title of gentry and treated as local elites. Thus, the quota system served

as an institutional means of regulating the power of local elites by dictating its

size (Elman, 2000). A prefecture with higher quotas thus had a larger number of

local elites. The empirical results of testing this mechanism are shown in Table 8.B,

in which I create an interaction term quota*purchase to capture the difference in

mobilizing resources from local community by officials. The interaction term is

consistently negative and statistically significant in Columns 1 to 3 of Table 8.B,

suggesting that officials by exam were more effective in mobilizing resources from

local elites. Figure 10 presents the marginal effects of being an official by purchase

on relief efforts in a prefecture conditional on quotas. The differential impact of

an official’s ability in utilizing resources was stronger when local elites were more

powerful. This empirical result is different from that of Xu (2017), who shows that

political connections harmed bureaucratic performance in the British Empire. One

possible reason is that political elites were homogeneous in Imperial China in terms

of educational background and income source.

21

The quantitative results are consistent with qualitative historical evidence. Histori-

ans document that officials persuaded local elites to contribute to relief funds or set

up distribution centers for grain. In the late Qing period, local elites also funded

charitable institutions to shelter widows and orphans, but these institutions were

initiated and sponsored by local governments (Li, 2007).


8.3 Public Virtue

In this section, I provide evidence that officials by exam were less likely to extract

from local community. These “honest” officials were more likely to adopt policies

that increase state capacity in the long run. Moreover, I present qualitative evidence

suggesting that public virtue can be an outcome of socialization.

The political economy literature on political selection has focused on the use of re-

election as a reward for exercising restraint. But not all politicians are narrowly self-

interested, some harbor what I call an intrinsic motivation of “public virtue” when

they are in office. For these intrinsically motivated officials, the greatest satisfaction

of office does not derive from seeking rents but come from the realization of an

inner desire to realize the public good. When self-interest and intrinsic values are in

conflict, they are likely to sacrifice the opportunity of extracting rents for intrinsic

values. To be sure, an official’s motivation is unobservable; we can only infer it from

behavior. But using policy to infer motivation has certain advantages. First, it is

more “truthful” than reported motivation. Second, it has better external validity

and policy implications than experimental studies that rarely touch on real trade-offs

between personal income and intrinsic values.

In my case, I expect officials by exam are less likely to engage in over-extraction. The

most important policy stimulant in an agricultural society after a disaster occurs is

tax reduction, which is designed to stimulate productivity and encourages refugees to

relocate to their hometowns. More importantly, reducing taxes significantly reduces

local officials’ illegal income because they are no longer “eligible” to collect surplus

tax. Zelin (1992) writes that a surplus tax was levied on the tax grain in order to

cover eventual losses during transport. It was originally a transport-loss surcharge

allowing the tax collectors to deliver exactly the amount of tax grain requested

according to the tax quota. But in reality, this transport-loss surcharge became a

cash cow for local administrators as they often charged as much as 20 or 30 per cent,

even up to 50 per cent. Implementing tax reduction policies means that the local

22

officials lost this source of illegal income. Furthermore, granting tax remissions had

to be proposed by local officials after they had investigated the severity of disasters

and evaluated the loss of tax revenues due to disasters. They then submitted requests

to the central state and asked for tax remissions for their locality. This process was

physically arduous because the local administration had to complete a thorough

investigation and computation. In 1728, the Qing emperor admonished a local

official for refusing to implement tax remission under his jurisdiction (Pierre-Etienne,

1990). We can safely conclude that tax remissions make officials less likely to be

involved in extraction and that requesting such policies from the central state implies

an official valuing his intrinsic values more than personal material interests.

Table 9 shows the empirical test of this relationship. I regress the number of tax re-

ductions in prefecture i and year t against whether an official entered officialdom by

purchase when disaster occurred. The interaction term disaster*purchase is consis-

tently negative and statistically significant in Columns 1 to 3, suggesting that facing

disasters, officials by purchase were less likely to request tax reduction policies from

the central state.

Besley (2005) argues that some politicians have qualities that make them trust-

worthy and these qualities are hard-wired into preferences rather being dependent

on external reinforcement. Certainly, these preferences are hard-wired, but I use

some qualitative evidence to suggest that these preferences can be an outcome of

socialization, more accurately, exam socialization. The curriculum of the Imperial

Chinese Civil Service exam was conducive to a virtuous bureaucracy. Confucian

classical texts were a main component of the exam content, as reported above in

Table 1. Students had to spend years memorizing and internalizing these moral

teachings before they finally took the exam. Benevolence (ren) was considered the

highest virtue in Confucian teachings:

The Master said, wealth and honor: these are what everyone desires,

but if he cannot obtain them without violating his principles, he will not

pursue them. Poverty and lowliness: these are what everyone hates, but

if he has to abandon his principles to get rid of them, he will not avoid

them. If the gentleman avoids ren, how shall he make his name? A

gentleman does not sacrifice ren for a meal. Under good circumstances,

he upholds it; in deepest distress he upholds it (The Book of Analects,

4:5 (1998)).

More than ethical teaching, ren is also the basis of Confucian political theory. Ac-

cording to Confucius, an inhumane ruler loses his Mandate of Heaven or the right to

23

rule, and his subjects are entitled to rebel against him. A ruler should be empathetic

to the sufferings of his subjects and try his best to alleviate their suffering. In policy

terms, this usually means low tax rates so that the people can keep most of their

harvest to themselves:

Ai Gong asked You Ruo: “It is a year of bad harvest, and my basic

needs cannot be met; what is to be done?” You Ruo replied: “Why not

tax people’s income at 10 percent?” Ai Gong said: “I still don’t have

enough revenues if I tax them at 20 percent. If the people have enough

income, rulers will also have enough. But if the people starve, how can

a ruler expect to obtain revenues?”(Mencius, 12:9 )

These Confucian Classics all share one feature: they try to make aspiring officials

internalize policy preferences consistent with the well-being of the people, which is

understood as a low tax burden. In fact, qingyao bofu (light corvee and low tax rates)

was the state policy for almost all dynasties (Zelin, 1992). These historical materials

provide strong evidence that exam preparation is itself a process of socialization that

attempt to make officials internalize social values.


8.4 Loyalty as A Competing Mechanism

A competing hypothesis to explain the empirical regularity between bureaucratic

quality and state capacity is that officials by exam were perceived as more loyal

than were officials by purchase. Officials by purchase could be seen as opportunistic

and had no vested interest in maintaining regime stability by the political center.

The central state, as a result, might transport fewer needed resources to prefectures

governed by officials by purchase out of concern for misuse of intergovernmental

aid. To test this competing mechanism, I analyze the relationship between how an

official entered officialdom and local state capacity, conditional on his ethnicity. I

split the data into two groups: Manchu officials and Han-Chinese officials. In the

Qing dynasty, Manchus were deemed more loyal because they shared the same ethnic

identity with the rulers and the high-level officials were disproportionately Manchus.

By contrast, Han officials were more capable but less trustworthy (Wakeman, 1977).

Despite being less educated, the Manchus received generous quotas in the Civil

Service Exam from the rulers. Moreover, they were allowed to take the exams in

24

their own language rather than classical Chinese, and the exam questions were much

simpler, without policy questions (Elman, 2000). For Manchus, the Civil Service

Exam was unable to select competent officials. In Columns 1 and 2 of Table 10,

whether a Manchu official got his office via purchase has no statistically significant

effect on local state capacity, suggesting that loyalty cannot explain the relationship

between whether an official took the Civil Service Exam and local state capacity.


9 Conclusion

The literature on state development has focused on military campaigns as a financial

inducement for rulers to invest in state capacity. But this theory is not sufficient to

explain state development or lack thereof beyond Western Europe. Despite extensive

warfare, China’s early state institutions did not develop into an effective state that

was able to regulate the economy and tax on a broad base. I argue that Chinese

rulers’ financial strategy to cope with military expenditures, namely, sale of offices,

undermined merit-based bureaucratic recruitment, which in turn impaired state

capacity, measured by the state’s ability to handle crisis.

To test this theoretical argument, I use an original dataset on the Imperial Chinese

Civil Service Exam between 1644 and 1911. My main empirical analysis provides

evidence for the positive linkage between merit-based bureaucratic recruitment and

state capacity. Making entry to the bureaucracy conditional on passing the Im-

perial Chinese Civil Service Exam produced a capable pool of bureaucrats. Facing

disasters, officials by exam were more likely to exert famine relief efforts compared to

officials by purchase. In particular, merit-based recruitment promoted esprit de corp

among political elites who were linked by the Civil Service Exam. Their common

sense of commitment to upholding public interest curbed corruption, and lowered

the transaction cost of utilizing local resources for the purpose of crisis manage-

ment. But the emperors’ myopic choices of irregular public revenues undercut the

institutional foundation of building effective state. Officials who were selected into

bureaucracy via purchase were not motivated to restrain from corruption or other

behaviors that weakened government performance.

The discussion in this paper puts emphasis on bureaucracy as a pillar of state ca-

pacity, which tends to be overlooked by the existing literature on state capacity.

This argument has implications for finding alternative approaches to building ef-

25

fective states in developing countries because a selective, merit-based bureaucracy

provides a cost-effective way to increase government performance. My argument pre-

sented above shares a core insight with Dahlstrom and Lapuente (2017) in the sense

that we do not use the principal-agent models but instead discuss why motivation

takes precedence over monitoring. Besides performance-based pay and tournaments

among public employees for high-level positions, merit-based recruitment provides

another possible mechanism to improve government performance. It also has impli-

cations for the role of bureaucracy in long-term economic performance. Much of the

discussion of economic growth has focused on regime type (Przeworski et al., 1999);

public administration receives less attention. In reality, public administration consti-

tutes the day-to-day implementers of national strategies. A competent bureaucracy

is associated with the economic take-off in East Asia (Evans, 2012). Analysis of

bureaucratic characteristics can shed light on the causal mechanisms through which

economic growth is achieved by improving the quality of public administration.

I conclude with two potential directions for future research. My paper examines

the deleterious effects on state capacity of compromised merit-based bureaucratic

recruitment but it does not discuss the scope conditions. Future research should

analyze the conditions under which the trade-off between provisional fiscal relief

and sale of offices may take place from a broader cross-national perspective and its

long-term consequences on economic performance. Second, future research should

explore under what conditions political leaders are able to establish a meritocratic

bureaucracy and other state institutions out of low-capacity equilibria. Countries

such as China, Japan and South Korea built effective states without meeting the

necessary conditions of the bellicist model. This line of inquiry is closely related to

the discussion of state-led industrialization and will provide a different approach to

state making from the bellicist theory.

26

References

Acemoglu, D., Garcia-Jimeno, C., and Robinson, J. A. (2015). State capacity and

economic development: A network approach. American Economic Review,

105(8):2364–2409.

Acemoglu, D., Johnson, S., and Robinson, J. (2005). The rise of europe: Atlantic

trade, institutional change, and economic growth. American economic review,

95(3):546–579.

Acemoglu, D., Johnson, S., and Robinson, J. A. (2002). Reversal of fortune: Geog-

raphy and institutions in the making of the modern world income distribution.

The Quarterly Journal of Economics, 117(4):1231–1294.

Ali, M., Fjeldstad, O.-H., Jiang, B., and Shifa, A. B. (2015). Colonial legacy, state-

building and the salience of ethnicity in sub-saharan africa. The Economic

Journal.

Baro, M. and Deubel, T. F. (2006). Persistent hunger: Perspectives on vulnerability,

famine, and food security in sub-saharan africa. Annual Review of Anthropology,

35:521–538.

Bates, R. (2014). Markets and States in Tropical Africa: the Political Basis of

Agricultural Policies. University of California Press.

Bates, R. (2015). When Things Fell Apart. Cambridge University Press.

Beramendi, P., Dincecco, M., and Rogers, M. (2018). Intra-elite competition and

long-run fiscal development. Journal of Politics.

Besley, T. (2005). Political selection. Journal of Economic Perspectives, 19(3):43–60.

Bhavnani, R. R. and Lee, A. (2018). Local embeddedness and bureaucratic perfor-

mance: Evidence from india. The Journal of Politics, 80(1):71–87.

Boone, C. (2003). Political Topographies of the African state: Territorial authority

and Institutional Choice. Cambridge University Press.

Brautigam, D. A. and Knack, S. (2004). Foreign aid, institutions, and governance

in sub-saharan africa. Economic Development and Cultural Change, 52(2):255–

285.

Brewer, J. (2002). The Sinews of Power: War, Money and the English State 1688-

1783. Routledge.

27

Centeno, M. A. (2002). Blood and Debt: War and the Nation-state in Latin America.

Penn State Press.

Chattopadhyay, R. and Duflo, E. (2004). Women as policy makers: Evidence from

a randomized policy experiment in india. Econometrica, 72(5):1409–1443.

Chaudhry, K. A. (1989). The price of wealth: Business and state in labor remittance

and oil economies. International Organization, 43(1):101–145.

Dahlstrom, C. and Lapuente, V. (2017). Organizing Leviathan: Politicians, Bureau-

crats, and the Making of Good Government. Cambridge University Press.

Dell, M., Lane, N., and Querubin, P. (2017). The historical state, local collective

action, and economic development in vietnam.

Dincecco, M. (2011). Political transformations and public finances: Europe, 1650–

1913. Cambridge University Press.

Dincecco, M., Federico, G., and Vindigni, A. (2011). Warfare, taxation, and political

change: Evidence from the italian risorgimento. The Journal of Economic

History, 71(4):887–914.

Dincecco, M. and Wang, Y. (2017). Violent conflict and political development over

the long run: China versus europe. Annual Review of Political Science.

Elman, B. (2000). A Cultural History of Civil Examinations in Late Imperial China.

University of California Press.

Evans, P. (2012). Embedded Autonomy: States and Industrial Rransformation.

Princeton University Press.

Fearon, J. (1999). Electoral accountability and the control of politicians: Selecting

good types versus sanctioning poor performance. Democracy, Accountability,

and Representation, 55:61.

Garfias, F. (2018). Elite competition and state capacity development: Theory and

evidence from post-revolutionary mexico. American Political Science Review,

112(2):339–357.

Guardado, J. (2018). Office-selling, corruption and long-term development in peru.

American Political Science Review, 112:971–995.

Hendrix, C. (2010). Measuring state capacity: Theoretical and empirical implica-

tions for the study of civil conflict. Journal of Peace Research, 47(3):273–285.

28

Herbst, J. (2014). States and Power in Africa: Comparative Lessons in Authority

and Control. Princeton University Press.

Hui, V. T.-b. (2005). War and State Formation in Ancient China and Early Modern

Europe. Cambridge University Press.

Kaske, E. (2011). Fund-raising wars: Office selling and interprovincial finance in

nineteenth-century china. Harvard Journal of Asiatic Studies, pages 69–141.

Kuhn, P. (1970). Rebellion and Its Enemies in Late Imperial China: Militarization

and Social Structure, 1796-1864, volume 49. Harvard University Press.

Li, L. M. (2007). Fighting famine in north china: State, market, and environmental

decline, 1690s-1990s.

Manion, M. (2006). Democracy, community, trust: The impact of elections in rural

china. Comparative Political Studies, 39(3):301–324.

Manion, M. (2015). Information for autocrats: Representation in Chinese local

congresses. Cambridge University Press.

Manion, M. (2017). “good types” in authoritarian elections: The selectoral connec-

tion in chinese local congresses. Comparative Political Studies, 50(3):362–394.

Mann, M. (2012). The Sources of Social Power: Global Empires and Revolution,

1890-1945, volume 3. Cambridge University Press.

Mares, I. and Queralt, D. (2015). The non-democratic origins of income taxation.

Comparative Political Studies, 48(14):1974–2009.

Morrisson, C. and Snyder, W. (2000). The income inequality of france in historical

perspective. European Review of Economic History, 4(1):59–83.

North, D. C. and Weingast, B. R. (1989). Constitutions and commitment: the

evolution of institutions governing public choice in seventeenth-century england.

The Journal of Economic History, 49(4):803–832.

Pierre-Etienne, W. (1990). Bureaucratie et Famine en Chine au Dix-Huitieme Siecle.

Ecole des hautes etudes en sciences sociales.

Pomeranz, K. (2009). The Great divergence: China, Europe, and the Making of the

Modern World Economy. Princeton University Press.

Przeworski, A., Stokes, S., and Manin, B. (1999). Democracy, Accountability, and

Representation. Cambridge University Press.

29

Qu, T. (1969). Local Government in China Under the Ching, volume 95. Stanford

University Press.

Queralt, D. (2018). The legacy of war on fiscal capacity.

Rosenthal, J.-L. and Wong, R. B. (2011). Before and Beyond Divergence. Harvard

University Press.

Stasavage, D. (2010). When distance mattered: Geographic scale and the develop-

ment of european representative assemblies. American Political Science Review,

104(4):625–643.

Stasavage, D. (2016). Representation and consent: Why they arose in europe and

not elsewhere. Annual Review of Political Science, 19:145–162.

Tilly, C. (1992). Coercion, Capital, and European States, AD 990-1990. Oxford

Blackwell.

Tsai, L. (2007). Solidary groups, informal accountability, and local public goods

provision in rural china. American Political Science Review, 101(2):355–372.

Wakeman, F. (1977). Fall of Imperial China. Simon and Schuster.

Xu, D. (1974). Qingdai juanna zhidu(Contributions in Qing Dynasty). Wen hai

chuban she.

Xu, G. (2017). The costs of patronage: Evidence from the british empire. American

Economic Review.

Zelin, M. (1992). The Magistrate’s Tael: Rationalizing Fiscal Reform in Eighteenth-

century Ching China. University of California Press.

Zhang, Z. (1955). The Chinese Gentry. University of Washington Press.

Zhang, Z. (2011). Qingdai dao fu ting zhou xian dengji zhidu de queding(the ranking

system of prefecture and county in the qing dynasty). Mingqing luncong (History

of Ming and Qing), 11.

30

Figure 1: The Qin Dynasty Map and Its Comparison with Present-day Chinabu0

[][]

[][]

31

Figure 2: Government Expenditure and Wars

32

Figure 3: The Hierarchy of Imperial Chinese Civil Service Exam

Prefectural Exams( 1.5%)

Provincial Exams( 5%)

Metropolitan Exams( 20%)

Palace Tests(Hanlin

Academy)

33

Figure 4: Example of Local Gazetteers

34

Figure 5: Total Famine Relief Efforts

35

Figure 6: Total Famine Relief Efforts (20 Years Moving Average)

36

Figure 7: Average Famine Relief Efforts (20 Years Moving Average)

37

Figure 8: Grand Canal in Imperial China

38

Figure 9: Treaty Ports in China

39

Figure 10: Marginal Effect of Being An Official by Purchase on Mobilizing ResourcesFrom Local Elites

40

Table 1: Percentage of Officials Becoming Local Officials Through Civil Ex-aminations, Inheritance, Purchase during the Qing Dynasty

Year No.of Officials Exam Inheritance Purchase Other1764 2,071 72.5% 1.1% 22.4% 4%1840 1,949 65.7% 1.0% 29.3% 4%1871 1,790 43.8% 0.8% 51.2% 4.2%1895 1,975 47.9% 1.2% 49.4% 1.5%

Source: Ping-ti Ho, The Ladder of Success in Imperial China New York:Columbia University Press 1962), p. 49, table 2. Li Tie, Zhongguo WenguanZhidu (The Chinese Civil Service System)(Peking: Chinese Political University,1989), p. 171.

41

Table 2: Bureaucracy as Determinant of State Capacity

Hypothesis Causal mechanisms Observable indicators

Merit-based bureaucratic recruitmentincreases state capacity.

Intrinsic motivation:The process of socialization of intrinsic values ofholding offices will curb over-extraction.

tax reduction

Mobilizing resources :Officials who are selected into the bureaucracythrough competitive exam are better ablethan others to mobilize resources.

connections with resource holders.

Loyalty :The political center prioritizes officials selectedby competitive exam over others becausethey are more loyal.

ethnic identity

42

Table 3: Format of Provincial and Metropolitan Civil Service Examinations Duringthe Qing Dynasty, 1787-1792

Session No. No. of QuestionsONE1. Four Books 3 quotations2. Poetry question 1 poetic modelTWO1. Change 4 quotations2. Documents 4 quotations3. Poetry 4 quotations4. Annals 4 quotations5. Rites 4 quotations6. Discourse 1 quotation (dropped in 1793)THREE1. Policy questions 5 essays

Source: Elman, Benjamin (2000), A Cultural History ofCivil Examinations in Late Imperial China. Berkeley: Uni-versity of California Press., p. 564.

43

Table 4: Qing Dynasty Policy Questions Classified by Topic: Zhejiang Province,1646-1859 (460 Questions, Top 15 Ranks Only)

Rank Topic % of Total1 Classical Studies 14.12 Learning/Political Selection 10.73 Economy 9.64 World Ordering 7.85 History 7.46 Tao-hsueh 6.17 Literature/Poetry 5.17 Local Governance 5.19 Philology 4.210 National Defense 3.811 Law 3.113 Agriculture 2.713 Military Matters 2.715 People’s Livelihood 2.2

Source: Elman, Benjamin (2000), A Cultural History ofCivil Examinations in Late Imperial China. Berkeley:University of California Press., p. 720. The original dataare from Pen-ch’ao Che-wei san-ch’ang ch’uan-t’i pei-k’ao(Complete listing of all questions from the three sessions ofthe Zhejiang provincial civil examinations during the QingDynasty). Compiled ca. 1860. World Ordering mainlyrefers to statecraft.

44

Table 5: Baseline Results

Dependent Variable: Famine Relief(1) (2) (3) (4)

OLS OLS OLS OLS

purchase -0.019 -0.008 -0.008 0.019(0.050) (0.050) (0.050) (0.058)

disaster 0.441 0.440 0.440 0.492(0.059) (0.059) (0.059) (0.081)

disaster*purchase -0.278 -0.282 -0.282 -0.303(0.093) (0.093) (0.093) (0.121)

Manchu -0.093 -0.093 -0.064(0.052) (0.052) (0.068)

newly appointed -0.001 -0.034(0.051) (0.066)

Observations 8,491 8,491 8,491 5,921R-squared 0.143 0.143 0.143 0.142Year FE Y Y Y YProvince FE Y Y Y YTime 1644-1911 1644-1911 1644-1911 1662-1820

Note: Bolded coefficients indicate statistical significance,with p<.05 adopted as level of significance.

45

Table 6: Income, Geography and Western Influence

Dep

enden

tV

aria

ble

:F

amin

eR

elie

f(1

)(2

)(3

)(4

)(5

)(6

)(7

)(8

)O

LS

OL

SO

LS

OL

SO

LS

OL

SO

LS

OL

S

purc

has

e0.

014

0.01

50.

005

0.00

50.

007

0.00

60.

008

0.02

3(0

.050

)(0

.050

)(0

.050

)(0

.050

)(0

.050

)(0

.050

)(0

.050

)(0

.058

)dis

aste

r0.4

18

0.4

20

0.4

10

0.4

10

0.4

10

0.4

09

0.4

08

0.4

58

(0.0

58)

(0.0

58)

(0.0

58)

(0.0

58)

(0.0

58)

(0.0

58)

(0.0

58)

(0.0

79)

dis

aste

r*purc

has

e-0

.279

-0.2

79

-0.2

62

-0.2

62

-0.2

67

-0.2

58

-0.2

54

-0.2

86

(0.0

93)

(0.0

93)

(0.0

92)

(0.0

92)

(0.0

92)

(0.0

92)

(0.0

92)

(0.1

18)

pop

ula

tion

0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

0.00

0(0

.000

)(0

.000

)(0

.000

)(0

.000

)(0

.000

)(0

.000

)(0

.000

)(0

.000

)si

ze0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

0.0

00

(0.0

00)

(0.0

00)

(0.0

00)

(0.0

00)

(0.0

00)

(0.0

00)

(0.0

00)

(0.0

00)

coas

tal

city

0.2

68

0.2

64

0.2

64

0.3

53

0.3

96

0.4

10

0.4

56

(0.1

06)

(0.1

05)

(0.1

05)

(0.1

11)

(0.1

17)

(0.1

21)

(0.1

51)

acce

ssto

mai

nri

ver

0.2

47

0.2

47

0.2

07

0.1

79

0.1

83

0.13

3(0

.060

)(0

.060

)(0

.058

)(0

.058

)(0

.059

)(0

.070

)ri

cesu

itab

ilit

y0.2

82

0.2

73

0.2

79

0.2

66

(0.0

53)

(0.0

52)

(0.0

53)

(0.0

67)

terr

ain

rugg

ednes

s0.4

61

0.4

58

0.5

08

(0.1

30)

(0.1

29)

(0.1

58)

trea

typ

ost

-0.1

05-0

.044

(0.1

13)

(0.1

33)

Obse

rvat

ions

8,49

18,

491

8,49

18,

491

8,49

18,

491

8,49

15,

986

R-s

quar

ed0.

154

0.15

50.

156

0.15

60.

158

0.15

90.

159

0.15

5Y

ear

FE

YY

YY

YY

YY

Pro

vin

ceF

EY

YY

YY

YY

YIn

div

idual

Con

trol

sY

YY

YY

YY

YT

ime

1644

-191

116

44-1

911

1644

-191

116

44-1

911

1644

-191

116

44-1

911

1644

-191

116

62-1

820

Not

e:B

olde

dco

effici

ents

indi

cate

stat

isti

cal

sign

ifica

nce

,w

ith

p<.0

5ad

opte

das

leve

lof

sign

ifica

nce

.

46

Table 7: Information Cost


OLS OLS OLS OLS

purchase -0.014 -0.005 0.037 0.036(0.050) (0.050) (0.069) (0.085)

distance -0.001 -0.001 -0.001 -0.001(0.000) (0.000) (0.000) (0.000)


Observations 8,491 8,491 6,967 4,662R-squared 0.145 0.145 0.182 0.180Year FE Y Y Y YProvince FE Y Y Y YIndividual Controls N Y Y YPrefecture Controls N N Y YTime 1644-1911 1644-1911 1644-1911 1662-1820


47

Table 8.A Mobilizing Resources from Central Government

Dependent Variable: Famine Relief(1) (2) (3)

OLS OLS OLSpurchase -0.121 -0.120 -0.170

(0.095) (0.095) (0.094)official*purchase -0.003 -0.003 -0.000

(0.002) (0.002) (0.002)

Observations 4,563 4,563 4,563R-squared 0.205 0.206 0.212Year FE Y Y YProvince FE Y Y YIndividual Controls N Y YPrefecture Controls N N YTime 1644-1911 1644-1911 1644-1911

Table 8.B Mobilizing Resources from Local Elites

Dependent Variable: Famine Relief(1) (2) (3)

OLS OLS OLSpurchase 0.153 0.141 0.110

(0.162) (0.163) (0.157)quota*purchase -0.002 -0.002 -0.002

(0.001) (0.001) (0.001)



48

Table 9: Intrinsic Motivation

Dependent Variable: Tax Reduction(1) (2) (3)

OLS OLS OLS

purchase 0.039 0.037 0.126(0.134) (0.135) (0.134)

disaster 0.612 0.613 0.501(0.130) (0.130) (0.126)

disaster*purchase -0.537 -0.548 -0.457(0.216) (0.216) (0.213)



49

Table 10: Competing Mechanism: Loyalty

Dependent Variable: Famine Relief(1) (2)

OLS OLS

purchase 0.132 0.071(0.084) (0.118)

disaster*purchase -0.283 -0.130(0.176) (0.185)

Observations 2,345 1,933R-squared 0.235 0.293Year FE Y YProvince FE Y YIndividual Controls Y YPrefecture Controls N YTime 1644-1911 1644-1911


50

Appendix A Descriptive

A.1 Data Quality

Figure 11 presents the available observations by each year. As we can see, the data

quality is better between the time period from 1660 to 1820. I use this restricted

time period in my empirical analyses. In the future, I will complete data collection.

Figure 11: Number of Available Observations

A.2 Summary Statistics

Table 11 presents the summary statistics of my dataset.

51

Table 11: Summary Statistics

Variables Obs Mean SD Min Maxpurchase 8492 0.274 0.446 0 1relief 13399 0.566 2.488 0 54tax reduction 13400 2.256 5.637 0 128tax revolt 5106 0.028 0.193 0 3turnover 8492 0.364 0.518 0 4Manchu 8492 0.276 0.447 0 1official 13400 37.2 53.756 1 235quota 13400 172.92 91.170 35 423population 13400 2120000 1560000 170664 6845663size 13400 14970.22 8635.051 2511 44260coast 13400 0.2 0.4 0 1per capita tax in 1820 13400 0.113 0.104 0.009 0.641difficulty to tax(pi) 13400 0.32 0.466 0 1main river 13400 0.72 0.449 0 1rice 13400 1.923 0.876 0 3.556distance 13400 972.712 536.525 39.786 2080.143treaty 13400 0.1 0.3 0 1disaster 13400 0.147 0.354 0 1

52

Appendix B Additional Empirical Analyses

B.1 Selection Bias

Table 12: Balance Table

Variable exam purchase difference t-valuerice suitability 1.949 2.038 -.089 -4.348

(0.011) (0.017) (0.020)main river 0.692 0.704 -0.012 -1.070

(0.006) (0.009) (0.011)terrain ruggedness index 0.175 0.172 0.002 0.352

(0.004) (0.007) (0.008)coast 0.209 0.203 0.005 0.550

(0.005) (0.008) (0.010)distance 1005.621 1014.178 -8.556 0.619

(7.259) (11.623) (13.814)tax revolt 0.022 0.014 0.021 0.951

(0.004) (0.007) (0.003)disaster 0.538 0.535 0.004 0.294

(0.006) (0.010) (0.012)

Table 13: Selection Bias

Dependent Variable: Purchase(1) (2) (3) (4)

OLS OLS OLS OLS

disaster 0.001 -0.004 -0.004 -0.005(0.018) (0.017) (0.017) (0.017)

disaster t-1 -0.007 -0.007(0.018) (0.018)

disaster t-2 -0.013(0.012)

Observations 8,492 6,968 6,967 6,967R-squared 0.069 0.083 0.083 0.084Year FE Y Y Y YIndividual Controls Y Y Y YPrefecture Controls N Y Y YTime 1644-1911 1644-1911 1644-1911 1644-1820Province FE Y Y Y Y


53

B.2 Early State Investment

Although I have controlled for potential endogeneity by including fixed effects, a

different interpretation of my findings is that they reflect the cumulative effects

of early state capacity, namely, investment in local infrastructure had a negative

cumulative effect on the probability of disaster occurring and thus, led to fewer

famine relief efforts. In this case, more famine relief efforts actually imply lower

state capacity. If early state investment in local infrastructure was the main driver

for fewer occurrence of disasters, we would expect to see a statistically significant

negative relationship between them. I measure early state investment in local in-

frastructure in two ways: (1) the per capita tax in 1820 at prefectural level, (2) the

designations by the Qing state indicating characteristics of prefectures pi (difficult

to gather taxes)11. Table 14 shows that early state investment in infrastructure has

no significant impact on the probability of disaster occurring, implying that famine

relief is not an inverse measure of state capacity.

Table 14: Early State Capacity

Dependent Variable: Disaster(1) (2)

OLS OLS

taxpc1820 -0.088(0.123)

difficulty of taxation(pi) -0.004 0.033(0.023) (0.042)

Observations 5,270 1,940R-squared 0.189 0.177Year FE Y YProvince FE Y YIndividual Controls Y YPrefecture Controls Y YTime 1723-1911 1820-1911


To further illustrate this relationship, I regress the variable disaster against purchase.

As Table 15 shows, the variable purchase at both time t and t-1 has no statistically

11The data on land tax at prefectural level were rare. I restrict the sample to the time periodfrom 1820 to 1911 when I use the per capita tax in 1820. In 1723, the Qing central state startedranking prefectures based on the difficulty of governance. Pi, the difficulty to tax, is a proxy forfiscal capacity at prefectural level. It is an indicator variable that takes the value of 1 if it hadbeen difficult to collect taxes and 0 otherwise. I restrict the sample to the time period from 1723to 1911 when I use pi

54

significant impact on whether a prefecture experienced disaster, further confirming

that officials exhibited different abilities and harbored different motivations when

implementing policies designed by the political center.

Table 15: Early State Capacity (II)

Dependent Variable: Disaster(1) (2) (3) (4)

OLS OLS OLS OLS

purchase 0.001 -0.003 0.003 -0.001(0.008) (0.010) (0.010) (0.012)

purchase t-1 -0.000 -0.001(0.010) (0.012)

Observations 8,492 6,968 5,789 4,692R-squared 0.125 0.133 0.143 0.152Year FE Y Y Y YProvince FE Y Y Y YIndividual Controls Y Y Y YPrefecture Controls N Y N YTime 1644-1911 1644-1911 1644-1911 1644-1911


B.3 Extraction

A competing explanation for the empirical results is that the variable famine relief

actually measures officials’ preferences for extraction as they were able to divert

resources from the political center to their jurisdiction. To alleviate this concern, I

use the data on tax revolt from 1800 to 1911 to test this relationship. The variable

tax revolt is the number of tax revolt occurred in a prefecture i and year t. It is

reasonable to assume that the number of tax revolts was higher in a prefecture with

a corrupt official because he was more likely to be involved in collecting surcharges.

If famine relief captures extraction rather than local state capacity, we would expect

to see that famine reliefs predict tax revolts. As Table 16 shows, from Columns 1

to 3, past and current famine relief efforts cannot predict tax revolts.

B.4 Spatial Correlation of Errors

Given the nature of famine relief, spatial clustering may affect the validity of the

results. It is very likely that famine reliefs are not independent from each other

55

Table 16: Extraction and Famine Relief

Dependent Variable: Tax Revolt(1) (2) (3)

OLS OLS OLS

purchase -0.003 -0.003 -0.003(0.008) (0.008) (0.008)

relief 0.001 0.001 0.001(0.002) (0.002) (0.002)

relieft−1 -0.001 -0.001(0.001) (0.001)

relieft−2 -0.000(0.002)

Observations 2,512 2,512 2,512R-squared 0.146 0.146 0.146Year FE Y Y YProvince FE Y Y YIndividual Controls Y Y YPrefecture Controls Y Y YTime 1800-1911 1800-1911 1800-1911


in the same prefectures. I re-estimate the models using prefecture fixed effects

and clustered standard errors at the prefectural level in Table 17. The variable

disaster*purchase remains statistically significant and negative in Columns 1 to 4.

56

Table 17: Spatial Clustering


OLS OLS OLS OLS

purchase 0.079 0.066 0.079 0.096(0.074) (0.075) (0.074) (0.077)

disaster 0.408 0.409 0.408 0.446(0.087) (0.088) (0.087) (0.099)


new appointment -0.018 -0.018 -0.058(0.075) (0.075) (0.089)

Manchu -0.110 -0.110 -0.088(0.071) (0.071) (0.090)

population 0.000 0.000 0.000(0.000) (0.000) (0.000)

size 0.000 0.000 0.000(0.000) (0.000) (0.000)

coastal city 0.291 0.239 0.489(0.070) (0.076) (0.083)

access to main river 0.069 0.135(0.022) (0.020)

rice suitability 0.223 0.398(0.053) (0.063)

terrain ruggedness index -0.564 -0.629(0.100) (0.082)

treaty post -0.076 -0.166(0.035) (0.048)

Observations 8,491 8,491 8,491 5,986R-squared 0.178 0.177 0.178 0.177Year FE Y Y Y YProvince FE Y Y Y YPrefecture FE Y Y Y YIndividual Controls Y N Y YPrefecture Controls N Y Y YTime 1644-1911 1644-1911 1644-1911 1662-1820


57

War, Bureaucracy, and State Capacity: Evidence from ... · from Imperial China Peng Peng November...

Documents

Transcript of War, Bureaucracy, and State Capacity: Evidence from ... · from Imperial China Peng Peng November...