China’s Gilded Age
Why has the Chinese economy grown despite a crisis of corruption? Is China abnormal compared to the Western path of good governance leading to growth?
Through a comparative-historical approach, Yuen Yuen Ang reveals striking parallels between contemporary China and America’s Gilded Age in the late 19th-century, challenging the myth of “Chinese exceptionalism” and the implicit belief that Western economies had succeeded through “good governance.” She finds that while both America and China curbed predatory forms of corruption, “access money” (elite exchanges of power and profit) flourished, fueling growth yet leading to serious risks and pathologies—scandals, inequality, and financial bubbles—that the Chinese leadership is still struggling to escape. In short, China’s rise has produced a Gilded Age—that is, gold glazed on top of base metal—rather than a purely Golden one.
About the Book
Awards & Recognition
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Every two years, SIOE hands out the Douglass North Best Book Award for the best book in institutional and organizational economics published during the previous two years. Awarded by Society for Institutional and Organizational Economics (SIOE).
Although the competition was fierce, committee members ultimately reached a consensus decision: This year’s winner of the 2022 Douglass North Best Book Prize is The Gilded Age: The Paradox of Economic Growth and Vast Corruption, by Yuen Yuen Ang.
As members of SIOE know, the prevailing view of corruption is that it stifles economic growth. Yet counterexamples exist, even if we often think of them as exceptions that prove the rule. For example, the “robber baron” age in 19th-century U.S., or China over the last 40 years. Dr. Ang focuses squarely on trying to unravel the seeming paradox of growth coexisting with corruption.
In doing so, she develops provocative new theory to distinguish among different types of corruption, each of which has a distinct impact on economic activity. She combines this with novel exploration of data to derive support for her theoretical arguments. Ultimately, Dr. Ang delivers a compelling explanation for the apparent paradox of China’s high growth and high corruption – based on the specific nature of corruption in current China – and demonstrates that similar conditions existed in the U.S. during its 19th-century “robber baron” period, thus suggesting that such “exceptions” can be explained theoretically.
This outstanding book has already made substantial waves in academia and in policy circles, and we are confident that it will influence the direction of research on corruption for years to come.
We thank Professor Ang for producing this wonderful, thought-provoking book, and we are delighted for SIOE to honor The Gilded Age with the 2022 North Book Award. And, we encourage all SIOE members to read The Gilded Age and share it with their friends and loved ones!
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The Alice Amsden Book Award is given annually for the best book that breaks new ground in the study of economic behavior and/or its policy implications with regard to societal, institutional, historical, philosophical, psychological, and ethical factors. Awarded by Society for Advancement of Socio-Economics (SASE).
The book investigates the paradox of how China has been able to grow so fast for so long despite the prevalence of widespread corruption. Yuen Yuen Ang challenges the idea of Chinese exceptionalism regarding corruption by offering an insightful historical comparison between contemporary China and the nineteenth century United States during the Gilded Age. She develops an innovative methodology to capture the multidimensional nature of corruption, which extends the contribution of her research well beyond China, helping to disentangle the relationship between corruption and development more broadly.
She does not only break down different types of corruption in a conceptually nuanced manner but gathers data from an impressively broad range of sources – including opinion surveys, historical documents, interviews, macro-economic statistics – to provide robust evidence for the impact of various forms of corruption on development. The tight organization of a complex argument, the confident treatment of vast amounts of data, and the lucid writing make the book an informative and engaging read. Yuen Yuen Ang’s eclectic intellectual and methodological approach also ensures the book’s appeal to a broad interdisciplinary audience.
See the list of awardees here
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The Economist Recommends, “Six Books to Understand China’s Domestic Challenges” (29 Sep 2022).
“The market reforms introduced by Deng Xiaoping, who ruled from 1978 to 1992, helped China grow rich. They also created opportunities for corruption. But not all corruption is bad for economic growth, argues Yuen Yuen Ang. She breaks down graft into four varieties. The one that most worries China’s current leader, Xi Jinping, is “access money,” bribes or favours offered to senior officials in exchange for contracts, land or other privileges. This type of corruption acts like steroids, promoting investment and economic growth, says Ms Ang. The growth tends to be uneven, though. Ms Ang compares China’s reform period to America’s Gilded Age, when 19th-century robber barons amassed large fortunes using corrupt practices. Mr Xi’s anti-corruption drive, secretive and top-down, hardly represents a new Progressive Era.”
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See also David Rennie’s review of China’s Gilded Age in The Economist (June 2020):
“Arguing that conventional measures of corruption are too crude, Ms Ang ‘unbundles’ graft into four varieties. First there is petty theft. Perhaps involving a traffic policeman demanding and pocketing a fine, such corruption poisons economies. Then there is grand theft, eg, a dictator looting the central bank. That is also toxic to economies. Third is speed money, as when a shopkeeper pays a bribe for a permit that might otherwise never arrive. Ms Ang compares this to a painkiller that eases the agony of bad governance but cures nothing.
Then comes the variety that most worries Mr Xi: access money, or high-level bribes and favours offered to powerful officials and their families, in return for contracts or other privileges. Ms Ang compares this sort of corruption to steroids… Like steroids, access money promotes unbalanced growth, it notes. Often such graft directs funds towards property deals, a swift route to riches for officials in China, where land use is state-controlled…
Ms Ang compares China’s early phase of economic opening to America’s Gilded Age, when 19th-century robber barons suborned politicians to let them build railways, private monopolies and commercial empires.”
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Awarded by the Comparative Historical Sociology Committee, American Sociological Association (2021)
Aside from making an important contribution to the analysis of the relationship between corruption and capitalism, we appreciated your innovative conceptualization of corruption, careful attention to matters of measurement and comparative analysis, and combination of clear writing and thoughtful presentation.
INET Video Lecture
How best can we understand both the bright and dark sides of China’s rise? Through the lens of American history.
China and America are often portrayed as two opposing civilizations destined to clash. In reality, the Chinese path to a “gilded” - rather than golden - mixture of wealth and capitalist excesses is remarkably similar to the American experience.
Featured Glossary Terms
Access money is a type of corruption involving high-stakes exchanges between business and political elites for exclusive, lucrative privileges, and not merely to bypass red tape (in contrast to speed money).
Unbundling Corruption is a typology that disaggregates corruption into four distinct types—petty theft, grand theft, speed money, and access money—instead of treating corruption as a one-dimensional problem.