View Full Version : From Transaction Cost to the Corruption in Ancient China (1)

May 29, 2009, 23:44
The payments of the Chinese officers were in terms of time rate, a proxy which does not show the actual contribution of the officers. Because of this payment method, there were no reasons but moral values for the officers to stop them from benefiting themselves. Thus, corruption seems so common in China as a trend.

To solve this problem, some people suggested that the Chinese government should adopt a Piece rate for its officers which paid to them according to their monthly contribution. However, this suggestion cannot hold water. The transaction cost of determining the criteria of contribution will be too high. Should it be counting the happiness of the people under the officer ruling? It is no doubt to vague. Should it be counting the GDP of the area? It is impossible for there was not a systematic accounting system in the Ancient China, it will be hard to avoid shirking and treating. Or will it be possible to count the quantity of the population or the number of unemployed? It will not be a fair system for there are too many factors affecting the number.

In this sense, a proxy will be a must. So should we neglect the problem? Of course not. This is the reason behind the Monitoring System in China was one of the most concerning element in every dynasty. The central governments have different contractual arrangements for the monitors. The contractual arrangement of the monitoring system will always influence the efficiency of the officers highly.

There were mainly three kinds of contractual arrangements. (To be continued):relief:

Jul 25, 2009, 15:26
thanks , it is wondeful

lunar Mike
Aug 2, 2009, 16:23
wow God Bless you