Abstract
This paper investigates the worldwide phenomenon of divergence'' between the East and the West. During the 8th to 10th centuries, Western Europe and China both achieved political stability, but they did so through dramatically different routes. Western Europe developed parliamentary representation on the basis of a power balance between the aristocracy and the crown, whereas China consolidated absolutism based on a state bureaucracy and an exam-based meritocracy. This paper provides empirical evidence to document this great political divergence, and it proposes a theory to understand the relationship between institutions and the monarchy-aristocracy power balance and the implications for political stability and long-run political development.
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