Historical Sources of Institutional Trajectories in Economic Development: China, Japan and Korea Compared

Abstract

This essay first provides a game-theoretic, endogenous view of institutions, and then applies the idea to identify sources of institutional trajectories of economic development in China, Japan, and Korea. It stylizes the Malthusian-phase of the East Asian economies as a peasant-based economy in which small-size conjugal families self-managed their working times between farming on small plots - leased or owned - and domestic manufacturing for personal consumption and markets. It then compares institutional arrangements across these economies that sustained otherwise-similar economies. It characterizes the varied nature of the political states of Qing China, Tokugawa Japan, and Yi Korea by focusing on the way in which agricultural taxes were enforced. It also identifies different patterns of social norms of trust that were institutional complements/substitutes to the political states. Finally, it traces the path-dependent transformations of these state-norm combinations along subsequent transitions to post-Malthusian phases of economic growth in the respective economies.