A theory of power structure and institutional compatibility: China vs. Europe revisited

Abstract: Historical narratives suggest that general differences exist in the power structure of society between Imperial China and Premodern Europe: the Ruler enjoyed a weaker absolute power in Europe, while in China the People were more on par with the Elites in terms of their power and rights. Why was a more/less symmetric Elite–People relationship compatible with a stronger/weaker absolute power of the Ruler? We build and analyze a game-theoretical model for the stability of autocratic rule, where we read a stronger absolute power of the Ruler as conditioning more of the power and rights of the ruled on the Ruler’s will. We show that if the Ruler’s absolute power is stronger, then a more balanced Elite–People relationship will stabilize the autocratic rule more; therefore, the Ruler’s incentive to promote such balance will be greater, thereby explaining the pattern of compatibility within the power structure across Imperial China and Premodern Europe. We also provide further discussion and stylized facts on the historical relevance of the theory.

Authors: Ruixue Jia, Gérard Roland, Yang Xie