Monday, 17 August 2015

Size and structure of disaster relief when state capacity is limited: China's 1823 flood

For the Chinese people, the 19th century was not only a century of economic stagnation, massive uprisings, and humiliation in the face of foreign aggressors, but also of devastating natural catastrophes probably causing millions to die of starvation and epidemics. One of these disasters was the flood in 1823, at the beginning of Emperor Daoguang’s reign. The Qing History Record offers a flavour of how contemporary historians saw the relevance of this flood: “As the Qing Dynasty was established, the country entered into a time of peace and prosperity never seen before in history […] However, this ended in 1823 because of the big flood.”

However, despite the gravity of this catastrophe, there is a lack of detailed research based on archival data. This is mainly because the historical records have been scattered until recently. Following a reorganization of China’s First Historical Archives and the instalment of a dedicated disaster section, though, researching particular catastrophes has become feasible for the first time. Therefore, in a recent EHES working paper Ni Yuping of Tsinghua University and Martin Uebele from the University of Groningen are able to present new archival evidence about this major disaster.

Our first piece of evidence is on the scale of the flood (see Figure 1). Since our sources tell province by province which county was inundated, we can tell that the flood affected 20 percent of China’s counties, and thus probably 80 million people. (Given that the more populous eastern provinces were affected more strongly, this is a conservative estimate.)

Figure 1. Share of counties flooded in 1823.

Apart from the sheer size the 1823 flood mattered in two more ways: First, there is a debate about the moral nature of the Qing Empire under the pretext that a Confucian ruler would have to care for his people especially in times of dearth. However, as principal-agent problems grow with the size of a pre-modern state, corruption might easily undermine even the most humane intentions of a state and could potentially turn it into the exact opposite. Evidence for this is plentiful (Will 1990, Shiue 2004), and has made its way into the survey literature (Ó Gráda 2007, p. 16). But given the limited state of archival evidence, can we confirm or refute statements made in literature with our new data?

Chiefly, our sources tell how much was spent for each province on various items of relief, from direct payments in silver to food shipments, and water infrastructure repairs, plus the various items of tax relief. Adding everything up and dividing the amount in silver by 80 million we find that spending per capita was sizable, even when compared to per capita payments in Europe: for example during the Irish famine (1845-49). But did it actually reach the provinces in need or was the money regularly embezzled?

Quantitative research on this has been provided by Carol Shiue (2004). Her data covers the 18th century and mainly contains the information if a province received disaster relief or not. Combining this with an extreme weather indicator from another source she finds no evidence that relief depended on weather events. Alternatively, she provides a theory that relief would rather be distributed due to military or political goals leading to moral hazard at the lower levels of administration.

Figure 2: Relation of tax relief and weather index, Chinese provinces, 1823.

The difference between her and our data is that we actually do know how much relief was spent in each province, and we can show that provinces with more flooded counties received more relief (Figure 2). So if the same distribution rules applied in this specific year 1823 were also used in the 18th century, her argument about no relationship between disaster and relief would not hold. 

The second important topic is that early in the 19th century in several countries around the world the foundations for modern economic growth were established (see an earlier blog post on paved road building in Westphalia, 1820s-1850s by one of the authors; Gallardo and Uebele 2015). To some extent this rested on public investments and went hand in hand with reforms of the bureaucracy, but to what extent was this possible in China at this time? Probably the Qing central state’s provision of short-term disaster relief might have been an obstacle to growth because the government’s funds were exhausted and did not suffice for substantial long-term investments. This could explain the “Daoguang Depression,” the secular lack of economic growth experienced in the first half of the 19th century.

We find that the total spending in 1823 amounted to about half of the state’s annual tax income. This is because spending was large, but also because the Chinese state was small. Its tax revenue was maybe 1-2 percent of GDP compared for example to Britain where it amounted to at least 10 percent of GDP. Bearing in mind the internal and external security challenges such as the Taiping Rebellion and the Opium Wars, we conclude that the capacity for further investments in infrastructure or bureaucratic reform was surely limited and may have contributed to China’s lack of economic growth. 

References:

Uebele, Martin and Daniel Gallardo-Albarrán (2015): “Paving the way to modernity: Prussian roads and grain market integration in Westphalia, 1821-1855,” Scandinavian Economic History Review 63 (1): 69-92.

Ó Gráda, Cormac (2007): “Making famine history,” Journal of Economic Literature, 45 (1): 5-38.

This blog post was written by Martine Uebele, Lecturer in Economic and Social History at University of Groningen

The working paper can be downloaded here: http://www.ehes.org/EHES_83.pdf



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