Coevolutionary Development: United States as Demonstration

Term

Coevolutionary Development: United States as Demonstration

Idea level

Application: Development

Definition

Coevolutionary Development: United States as Demonstration refers to Yuen Yuen Ang’s use of 19th-century U.S. development to show how the economy and fiscal capacities coevolved through improvisation and crisis-driven adaptation, rather than by establishing “good institutions” from the start. In How China Escaped the Poverty Trap, Ang traces how the United States built large infrastructure projects and accelerated industrialization through taxless public finance, which preceded modern systems of taxation and fiscal regulation.

Sources

Empirical demonstration:

• Ang, Yuen Yuen. How China Escaped the Poverty Trap (2016), Chapter 7, Section “The Revolution of Public Finance in the Antebellum United States”

Empirical expansion:

• Ang, Y.Y. “Fairy Tales of Western Development: The Non-Democratic Origins of Fiscal Capacity in Britain, the US, and China,” Chapter in Political Economy Rebooted (2026), posted on SSRN (2025).

Genealogy

[Paradigm] AIM (Adaptive, Inclusive, Moral Political Economy)

→ [Pillar] Adaptive Political Economy (APE)

→ [Pillar] Inclusive: early U.S. development did not conform to idealized Western templates

→ [Pillar] Moral: exposes fairy tales of Western development through fiscal history

→ [Theory] Coevolutionary Development

→ [Concept] Adaptive Fiscal Capacity (beyond taxation-centered accounts)

→ [Application: Development] 19th-century United States as demonstration of coevolutionary development

→ [Application] Taxless public finance as an early market- and state-building mechanism

Quotes

“But was this how development really happened in America? Did America, upon the ratification of the Constitution in 1789, begin with a complete package of good institutions?… I reconstruct a trajectory of mutual causal change between America’s state constitutional rules and markets during the antebellum period.”

— Ang, How China Escaped the Poverty Trap, Chapter 7, “The Revolution of Public Finance in the Antebellum United States,” p. 227-8

“When viewed from a coevolutionary perspective, it becomes clear that the United States did not in fact acquire a complete package of market-supporting institutions upon independence. Instead, the components of this package were evolved following independence, propelled by the economic depression that grew out of a period of rapid market building.”

— Ang, How China Escaped the Poverty Trap, pp. 232

“My analysis challenges this selective storytelling. Drawn from diverse but well-established historical literatures, the facts I present are not controversial in themselves. What unsettles some readers are my conclusions: they expose the messy, non-democratic origins of fiscal state formation in the West.”

— Ang, Fairy Tales of Western Development (2025)