How China escaped the poverty trap: mapping the coevolution of property rights and the economy

Development is more than a problem of growing from poor to rich. Cast more precisely in game theoretic terms, development is a problem of making the transition from one self-reinforcing equilibrium (poverty traps) to another equilibrium (rich and modern). How do poor countries that lack the ideal prerequisites for development kickstart growth?

I reject conventional linear arguments that either economic growth or good governance/institutions should come first in development. My approach is to systematically map the process of coevolution (mutual adaptation) between the economy, property rights, and development strategies over time to uncover the actual steps that societies have taken to escape the poverty trap.

In examining mutual adaptation, I zoom in on the mechanisms of evolution, e.g., variation (generating alternatives) and selection (choosing among alternatives). Applying this approach to the important case of China from 1978 to 2014, I show that development can be stylized as a coevolutionary - rather than linear - process that unfolds in three steps.

This analysis reveals that institutions and property rights needed to build new markets are qualitatively different from those that later emerge to sustain established markets. In China, the system of "directed improvisation" in China, introduced under Deng, provided the enabling conditions for actors to adapt and innovate local solutions to local problems.

About the Speaker

Yuen Yuen Ang is a political scientist and China scholar at the University of Michigan, with a PhD from Stanford University. Her work examines the relationship between economics and politics from a complex adaptive perspective-with an applied focus on China's rise as one of the greatest disruptions of our times.

She is the inaugural recipient of the Theda Skocpol Prize for Emerging Scholar, awarded by the American Political Science Association for "impactful empirical, theoretical and/or methodological contributions to the study of comparative politics." She is also named an Andrew Carnegie Fellow for "high-caliber scholarship that applies fresh perspectives to the most pressing issues of our times." She has won book and essay awards in global development, political economy, economic sociology, comparative historical sociology, and her writing was named among the "Best of Print" by Foreign Affairs.

Her first book, How China Escaped the Poverty Trap (2016), is acclaimed as "game changing" and "field shifting." It breaks new ground by applying a complexity and systems paradigm to explain China's rise - and development processes, more broadly. The sequel, China's Gilded Age: the Paradox of Economic Boom & Vast Corruption (2020), was featured in The Economist (Chaguan column) and Money Talks (The Economist's podcast). More recently, it was quoted in The Economist, The Financial Times, and The New York Times in connection with Xi's ongoing "common prosperity" drive

This event will be delivered online via Zoom.

Image credit: 'How China escaped the poverty trap' book cover, supplied by the author.