Nie Huihua on the non-Westernness of Chinese government and the challenge to innovation

Nie Huihua, a professor of economics at Renmin University, advocates for a departure from Western-centric viewpoints when analyzing China's development. He contends that a comprehensive understanding necessitates an integrated perspective that acknowledges the interplay of formal institutions, informal grassroots mechanisms, and cultural collectivism, which together form a self-consistent and adaptive governance system.

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First, I believe that when viewing things through a strictly Western framework, many phenomena become incomprehensible because the Western framework is only one perspective.

Nie draws a distinction between Western and Chinese systems, characterizing the former as a bottom-up electoral model where governments are elected and serve taxpayers. In contrast, China's system is described as a top-down accountability structure, where higher authorities can hold officials accountable for performance, reminiscent of historical supervision systems. He acknowledges that both systems have merits and drawbacks, noting that while Western systems showed clear advantages a decade ago, they have encountered issues, exemplified by the United States. He stresses that this comparative view allows for a more objective assessment of challenges within both systems.

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The Western system is more like a bottom-up electoral system, where governments are elected level by level and serve taxpayers. However, China’s system is more like a top-down accountability system, where if you’re not performing well, higher authorities can hold you accountable, similar to ancient supervision and inspection systems.

Furthermore, Nie points out that Western frameworks often prioritize the rule of law, political systems, and democracy. However, he notes that many East Asian countries, which he terms "low-text countries," rely significantly on implicit understandings and informal institutions rather than strictly formal, written rules. He refers to these as "incomplete contracts," where much of the operational framework is unwritten. This reliance on informal institutions, he explains, extends to national governance, citing historical examples from the Ming and Qing dynasties where local officials operated with a significant degree of personal staffing and support networks.

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Many East Asian countries are so-called low-text countries. Many of their social operational rules are not so formal or not explicitly written down, but instead they rely on implicit clauses and informal institutions. I call this “incomplete contracts”: many things are not formal, and the development of political systems depends on informal institutions.