The Influence Of Confucian Culture On The Inclusive Growth In China

Inclusive growth is the core content of national economics.Over the past four decades of reform and opening up,China has achieved remarkable economic progress,with rapid growth in Gross Domestic Product(GDP)propelling it to become the world’s second-largest economy.However,this process has also brought about challenges of uneven development,becoming one of the primary obstacles for China to pursue common prosperity.This study focuses on the power of culture,examining the influence of Confucian culture on the inclusive growth in China,with the aim of providing a new perspective for understanding the achievements and imbalances in China’s economic development.Existing research indicates that explanations for successful economic growth or development must not be limited to narrow economic variables.Among these,culture is recognized to play a significant role in explaining economic development.Confucian culture,as the principal and core component of Chinese traditional culture,has profoundly shaped China’s development trajectory and is a deep-seated factor influencing China’s economic achievements since the reform and opening up.However,the question of whether Confucian culture in modern economic development acts as a "barrier" or a "propellant" has long puzzled scholars,giving rise to two opposing theories: "Confucian resistance" and "Confucian impetus." This study aims to provide a new perspective to unravel this puzzle.Based on a historical examination of the social foundation of Confucian culture,this study distinguishes Confucian culture into two layers of tradition: "official Confucian tradition " and "folk Confucian tradition." Official Confucian tradition is defined as the "authoritarian" tradition,while folk Confucian tradition is defined as the "autonomous" tradition.Based on this distinction,this paper discusses the measurement indicators for official Confucian tradition and folk Confucian tradition.The study indicates that Confucian Temple indicators can reflect the characteristics of official Confucian tradition,while lineage genealogies are more suitable for measuring the influence of folk Confucian tradition.Spatial distribution differences show that the influence of official Confucian tradition is mainly concentrated in the middle reaches of the Yellow River,which is also the location of China’s traditional political center.In contrast,the influence of folk Confucian tradition is mainly manifested in the middle and lower reaches of the Yangtze River,especially in provinces with the highest density of lineages,such as Zhejiang,Jiangxi,and Hunan.Based on the concepts of "official Confucian tradition " and "folk Confucian tradition," this paper constructs a dynamic general equilibrium model to theoretically reveal the relationship between the two layers of Confucian tradition and economic growth.By incorporating Confucian culture into the production function and analyzing its transmission mechanism,this paper models the impact of Confucian culture on the economic growth and proposes a series of testable theoretical hypotheses and propositions.These hypotheses and propositions cover several key aspects,including: firstly,the relevant assumptions regarding the impact mechanism of the two layers of Confucian tradition on the economy;secondly,propositions concerning the impact of the two layers of Confucian tradition on the steady-state per capita income;and finally,propositions regarding the differences in steady-state per capita income among different regions due to the two layers of the Confucian tradition.These hypotheses and propositions form the basis of our empirical analysis.By employing micro-level data and integrating official Confucian tradition and folk Confucian tradition into a unified empirical framework,this paper examines the impact of the two layers of Confucian tradition on per capita income and multidimensional poverty.The research findings indicate that official Confucian tradition significantly lowers per capita income levels,while folk Confucian tradition significantly raises per capita income.Moreover,official Confucian tradition has a negative effect on multidimensional poverty reduction,whereas folk Confucian tradition has a positive effect.To address endogeneity issues in the model,instrumental variables are employed,and causal identification is successfully conducted.The pertinent findings effectively demonstrate the distinct influences of dual layers of Confucian culture on economically inclusive growth,providing a new perspective for answering the question of whether Confucian culture acts as a barrier or a propellant to economic development.A more in depth research indicates that the two layers of Confucian tradition influence the inclusive growth in China through three channels: human capital allocation,entrepreneurial spirit,and social capital.Analysis suggests that these three channels are closely related to the civil examination system,policies favoring agriculture over commerce,and clan autonomy traditions.Empirical test results further demonstrate that the two layers of Confucian tradition significantly affect human capital allocation.Official Confucian tradition tends to guide human capital toward non-productive activities,while folk Confucian tradition is more likely to lead human capital into productive activities.Additionally,the official Confucian tradition hinders the cultivation of entrepreneurial spirit,whereas the folk Confucian tradition contributes to the cultivation and development of entrepreneurial spirit.Furthermore,the official Confucian tradition suppresses the formation of social capital,whereas the folk Confucian tradition promotes the formation of social capital.These factors lead to different economic outcomes between official Confucian tradition and folk Confucian tradition.Finally,utilizing historical data,this study examines the persistence of regional economic development disparities from a long-term and macro-level perspective.The results indicate that the two layers of Confucian tradition have a lasting impact on economic development,thus causing persistent disparities in China’s economic development.Firstly,through a detailed analysis,this article reveals a strong historical persistence of economic development disparities among regions.Regions that were historically prosperous still exhibit higher per capita GDP and lower multidimensional poverty today,while historically backward regions remain relatively underdeveloped.Secondly,by distinguishing between the late Qing dynasty,the Republic of China period,and the early days of the People’s Republic of China,this paper examines the relationship between the two layers of Confucian tradition and historical economic development.The estimation results for the three historical periods all indicate that official Confucian tradition has hindered economic development,while folk Confucian tradition has promoted economic development.This finding confirms that the spatial differences in the two layers of Confucian tradition are deep-rooted cultural origins of persistent economic disparities among regions in China.This study offers a fresh perspective on explaining the achievements and imbalances in China’s economic development while providing a new approach to reconcile the opposing viewpoints of the "Confucian resistance" and "Confucian impetus " theories.The research yields the following insights:Firstly,although cultural differences may pose challenges to narrowing regional economic disparities in the short term,individual mobility can reduce these economic disparities.In the pursuit of common prosperity,it’s essential to carefully balance regional-coordinated development with shared prosperity among individuals.Emphasis should be placed on fostering spatial mobility among different groups,enhancing cultural exchange and mutual learning,promoting entrepreneurial spirit dissemination,optimizing talent resource allocation,and fostering the development of social capital.Therefore,compared to narrowing regional development gaps,emphasizing the reduction of income disparities among residents holds more positive policy significance.Secondly,by categorizing Confucian culture into official and folk traditions and elucidating their starkly contrasting impacts on economic growth from both theoretical and empirical perspectives,this study responds to the opposing viewpoints of the "Confucian resistance" and "Confucian impetus" theories.It also partially corrects some scholars’ one-sided understanding and biases toward Confucian culture.The complex diversity of Confucian culture indicates that it may encompass both valuable ideals beneficial to modern economic growth and adverse factors.Thus,we should not merely discuss the economic effects of Confucian culture but should comprehensively and meticulously differentiate and explore the connotations of Confucian culture on different levels.Objective evaluations of its impacts on various aspects of modern economic activities can better facilitate the inheritance,development,and selective abandonment of Confucian traditional culture,giving full play to its contemporary value in the Chinese-style modernization process.Thirdly,the profound and extensive influence of Confucian tradition on Chinese society suggests that informal constraints of Confucian culture may play a crucial role in economic development,especially in the current circumstances which the market mechanisms in China are not yet robust and institutional environments require further refinement.Therefore,we cannot overlook the constraining role of culture while advancing the construction of modern economic institutions.We need to fully absorb the positive factors of Confucian culture while making efforts to eliminate its negative aspects or creatively transform them to better construct a socialist market economic system that supports China’s economic modernization process.This implies the need of seeking a Chinese-style institutional framework that combines modern economic principles with traditional Chinese cultural values to foster economic growth in China.