How China Escaped the Poverty Trap by Yuen Yuen Ang

How China Escaped the Poverty Trap by Yuen Yuen Ang

Part 1
FRAMEWORK AND BUILDING BLOCKS

1

MAPPING COEVOLUTION

We do not need to be complex, however, just for the sake of 
being complex, but we do need to get over our simplicity hang-ups. 
Obviously, our theories will always be simpler than the worlds we 
study, or we are trying to reproduce these worlds rather than 
a theory of these worlds. 
— Elinor Ostrom and Xavier Basurto, “Crafting Analytical Tools to Study 
Institutional Change” 
 My interviews with local bureaucrats in China deliberately included a question 
that has long been debated in academic circles: In your locality, do you think it 
was effective governance that led to growth or growth that enabled the govern-

ment to improve? The bureaucrats were consistently astonished by the naiveté 
of this question. To them, the answer is obvious: causation runs both ways. One 
regular cadre in a city-level agency, who had no scholarly training whatsoever, 
gave a memorably insightful reply: 
 The economy and the bureaucracy interact and change together. If the 
economy is poor, then, inevitably, it will be difficult to improve gov-

ernance. . . . In reality, we do what we must and then adjust as we go 
along. . . . There must be a process. It’s impossible for a government 
to reform overnight. 
 More bluntly, another bureaucrat griped that the question posed was flawed. In 
his words, “To say that we should grow the economy and then improve the busi-

ness environment or vice versa are both misguided. Obviously, we must pursue 
both at the same time, like the pursuit of material and spiritual development.”  
 These replies suggest that development as a coevolutionary process is a plain 
reality to many practitioners and probably lay observers too. It is no wonder that 
they dismissed the question as academic. I concurred heartily with their practical 
insights and then pressed further: “Could you tell me, from the beginning, how 
did this process of interaction unfold? How did growth affect the bureaucracy, 
and in turn, how did bureaucratic reforms affect the economy?” This time, even 

How China Escaped the Poverty Trap by Yuen Yuen Ang