International Economic Review · Vol. 59, No. 1 · February 2018

Unified China and
Divided Europe

National University of Singapore · George Mason University
A severe and unidirectional threat of invasion pushed China toward political centralization. Europe faced a wider variety of smaller threats and stayed fragmented. Centralization gave China lower taxes and faster population growth in peacetime — and left it more exposed when the shock came.
The argument in one diagram
Same military geography, opposite political equilibria
Each panel is the model of §3 solved at its equilibrium. The continent runs left to right; the red ramp is invasion damage spreading inland from a frontier, the filled curve is military strength radiating from a capital. Where the curve clears the ramp, the interior is shielded.
Invasion damage Empire’s military Rival states’ militaries Territory shielded
§2 · The puzzle

One state, or a hundred

Since Montesquieu, Europe’s success has been credited to its political fragmentation. Yet for most of recorded history the richest region on earth was China — and China was usually one empire.

Between AD 0 and 1800, historical China, roughly the landmass from the Mongolian steppe to the South China Sea answered to a single authority for 1,008 years. Fewer than 80 states ruled any part of China across those eighteen centuries. Europe, over the same span, went from 37 sovereign states in AD 600 to 61 by 900 and 114 by 1300 — and stayed that way.

Figure 2
Number of sovereign states, AD 0–1800
Log scale. Since the Middle Ages there have been an order of magnitude more states in Europe than in China.
China (annual) Europe (century observations)
SOURCES · Wei (2011) for China; Nussli (2010) for Europe. Nussli undercounts entities inside the Holy Roman Empire, so the European series is a lower bound.
§2 · Two kinds of threat

Rarer wars, worse wars

Interstate war was ordinary in Europe and comparatively uncommon in China. But the conflicts China did fight were far more destructive, because they were not border adjustments between neighbours — they often involved the collapse of an entire empire.

Only two European wars before 1750 are estimated to have killed more than five million people. Five such wars are recorded for China, and each one had a nomadic dimension.

6 of 7
major waves of nomadic invasion across Eurasia since AD 1 that reached China
Chaliand (2005)
2 of 7
of the same waves that reached Western Europe
Chaliand (2005)
1,008
years China was ruled by a single authority, AD 0–1800
Ko & Sng (2013)
2.5
nomadic attacks per decade, on average, 220 BC – AD 1839
Bai & Kung (2011)
Figure 3(a)
Recorded conflicts by century and type
Europe fought many more conflicts; China’s were disproportionately against the steppe. Shade encodes conflict type within each region’s hue.
China · nomad China · other Europe · interstate Europe · other
SOURCE · Brecke (1999), Conflict Catalog.
Figure 3(b)
The twenty deadliest preindustrial conflicts
Hover any point. The Thirty Years War is the only European conflict that reaches the scale of China’s dynastic collapses.
China Europe Elsewhere
SOURCE · White’s compilation of estimated conflict death tolls, as used in the paper. All preindustrial death estimates are speculative; what matters is the order of magnitude.

Why direction matters

Before 1800 every major invasion of China came from the north. Mountains, rainforest and ocean sealed the other three flanks. Medieval Europe had no such luck: Vikings from the north; Arabs, Berbers and Turks from the south and south-east; Magyars and Mongols from the east.

That is the asymmetry the model turns on. A threat that always arrives from one direction can be met by one army standing in one place. Threats arriving from several directions cannot.

§3 · The model

A continent on a line

The continent is the interval [0, 1] with population spread evenly along it. A threat of size Λ strikes a frontier and decays inland at rate α. A regime picks a capital G and buys military M at cost θM²; its strength at distance t from the capital is M − βt². If the regime fails to shield a fraction δ of the continent, it is overthrown.

Capitals and armies below are the closed-form equilibrium of Propositions 1 and 2; the shielded region and the damage that gets through are integrated across the continent. Move the controls and watch which arrangement survives.

Interactive · Propositions 1 & 2
Solve the continent
Damage from invasion Military strength Shielded Capital
Λ threat size
α damage decay
β force decay
δ must shield
θ military cost
Empire
Two states
Viability across the threat range
Continent-wide net revenue under each arrangement, holding everything but Λ fixed. A curve entering the shaded band means that arrangement can no longer pay for its own defence. Values below −1 are clipped.

What the equilibrium implies

Seven results fall out. Two are about who survives; the rest are about what survival costs the people living there.

Implication 1Competition is wasteful With no external threat an empire buys no military at all. Rival states still arm against each other. Fragmentation burns resources for nothing.
Implication 2Competition is robust Because rivals over-arm, they end up shielding more than the minimum δ. An empire shields exactly δ and not a metre more.
Implication 3Capitals sit off-centre Facing a one-sided threat the empire puts its capital at 1−δ, on the threatened flank — not at the population centre.
Implication 4Empire wins one-sided fights One frontier, one army, and the whole continent’s revenue to pay for it. Small states are squeezed out.
Implication 5States win two-sided fights An empire must defend two distant frontiers from one centre. When force decays fast over distance (large β), that is ruinous.
Implication 6Empires tax less Cutting taxes buys loyalty more cheaply than buying soldiers. Rival states, already over-armed, have no such need.
Implication 7Empires grow faster, and fall harder Lower taxes mean higher fertility in peacetime. But a smaller shielded fraction means that when the invasion actually lands, the damage is deeper. Population growth under centralization has a higher mean and a higher variance.
§4 · Evidence from China

Did the steppe make the empire?

China offers 2,060 years of decadal data. The frequency of nomadic attacks comes from Bai and Kung (2011), who show that steppe incursions tracked exogenous swings in rainfall. Political unification comes from Wei (2011).

Data · 220 BC – AD 1839
Nomadic attacks and political unification, by decade
Shaded columns mark decades when a single regime ruled China. Drag across the chart to read any decade.
Nomadic attacks in the decade China unified Number of regimes
SOURCES · Bai and Kung (2011); Wei (2011). Reproduced from the paper’s replication data.

A test

Intuitively, we expect an attack in the current decade to make unification less likely: a state under assault fractures. But as the model predicts, the long-run effect is consolidation. An attack in the previous decade makes unification more likely.

Table 2, column (a) · replayed
Response of P(unified) to nomadic pressure
Simulated from the published ADL coefficients. A permanent increase of one attack per decade converges on the paper’s long-run estimate.
MODEL · yt = 0.906·yt−1 − 0.283·yt−2 + 0.256·yt−3 − 0.0120·xt + 0.0196·xt−1. Dependent variable is the unification dummy; x is nomadic attacks per decade. 203 decadal observations.
Tables 2–4
Long-run effect of one additional nomadic attack per decade
SpecificationContemporaneousOne decade later Long-run effectObs.
ADL, no controls−1.20 pp**+1.96 pp***+6.3 pp203
VAR, with controls+1.76 pp***+8.3 pp203
IV — droughts & floods−8.74 pp+13.4 pp**+20.4 pp203
The Wald statistic on the lagged attack terms is 11.36 — nomadic attacks Granger-cause political unification at the 1% level. The IV estimate is suggestive only: climate plausibly affected unification through channels other than the steppe, so the exclusion restriction is doubtful.
*** p<0.01 · ** p<0.05 · * p<0.1. Controls: droughts, floods, snow, low-temperature disasters, temperature, nomadic-conquest periods, time trend.

And Europe?

Europe cannot be tested the same way — state counts exist only at century intervals. But the narrative fits. Rome fell when its military edge eroded and threats multiplied along a very long border. Justinian’s reconquest collapsed under the Avars and Persians, then the Arabs. Charlemagne’s empire was pulled apart by Magyars, Vikings and Muslims arriving on three different fronts.

After the eleventh century the Viking and Muslim threats receded — and, as the model predicts, fragmentation simply persisted. The Mongol invasion of the thirteenth century was too brief to provide a sustained impetus toward European unification.

§5 · Consequences

Where the capital sits, what the peasant pays

If the model is right about why these political systems existed, it should also be right about how they behaved. Three predictions, three bodies of evidence.

Prediction · capitalsPolitical centre ≠ population centre For 1,418 of the years between 221 BC and AD 1911, China’s capital was Chang’an or Beijing — 8.4 years in every ten. Neither was the economic core. Under the Han only ~4% of the population lived in Chang’an’s region while 60% lived in the Guandong plain it was placed to shield. When the threat shifted east toward Manchuria, the capital moved east to Beijing. Constantine did the same thing: Constantinople covered the Danube and eastern fronts at once.
Prediction · taxationThe empire taxes less This reverses the traditional story that Chinese growth was strangled by a rapacious state. Per-capita tax in Europe ran roughly four times China’s. Correcting for silver being dearer in China — by measuring tax against a bare-bones subsistence basket — leaves the gap intact: 27% of subsistence in Europe against 6% in China in 1750.
Table 5
Per-capita tax revenue, grams of silver
 170017501780Total 1780 (t. silver)
Dutch Republic210.6189.4228.2466.8
England91.9109.1172.31,627.3
France43.548.777.61,962.0
Spain28.646.259.0642.5
European average52.158.077.3711.5
China10.411.89.22,769.3
The last column is the point about scale: China raised three to four times more total revenue than any single European state while taxing each subject roughly an eighth as heavily. Size, not extraction, is what an empire is for.
SOURCES · Karaman and Pamuk (2013); Sng (2014). European average includes Venice, Austria, Russia, Prussia and Poland-Lithuania alongside the four shown.
Figure 17
Population, and the volatility of population growth
Both series indexed to AD 1 = 100. The lower panel is the implied annual growth rate between successive observations.
China Europe
SOURCE · McEvedy and Jones (1978). Observations are 50–200 years apart, which smooths the series and works against finding the difference the model predicts.

Before AD 400 — when both ends of Eurasia were ruled by empires — the two population series behave alike. The divergence in volatility appears only after China consolidates and Europe fractures. That timing is the point.

Higher-frequency Chinese data from Cao (2000) makes the mechanism visible directly: the falls of Xin, Han and Sui, the An Lushan Rebellion, the Jurchen and Mongol invasions, the ends of Yuan and Ming — each leaves a crater. Between 1223 and 1292 China’s population fell by roughly 30 million, a third of the total. Europe had exactly one continent-wide collapse after Rome: the Black Death.

§6 · What this does not explain

The limits, stated plainly

We are explicit in the paper that the steppe is not the whole story, and we name two things our own mechanism cannot account for.

UnexplainedEurope fragments further after 1100 External threats subsided, yet the number of states kept climbing. Tilly (1990) points to the city-state corridor from England to northern Italy; Hoffman (2015) to the Catholic Church blocking first the Emperor, then the Habsburgs.
UnexplainedChina’s interregna get shorter after 1300 Chinese historians credit the imperial examinations, which dismantled the regional aristocracies that had fractured medieval China.
ComplementaryGeography and topography Kennedy and Diamond invoke Europe’s coastlines and mountains. Hoffman (2015) pushes back: average elevation is in fact higher in China, and no natural barrier separates France from Germany. Two of us take this up quantitatively in The Fractured-Land Hypothesis (Fernández-Villaverde, Koyama, Lin and Sng, QJE 2023), which finds topography sufficient but not necessary — a core region of highly productive land in northern China delivers unification on its own.
ComplementaryContingency The Investiture Controversy, the wars of religion, a logographic script in China against a phonographic one in Europe — accidents that happened to reinforce the centripetal and centrifugal tendencies already in place.

Our argument is about sequencing, not monocausality. Multisided threats fragmented Europe before 1100. That initial fragmentation is what let a rival Church and independent city-states entrench themselves — and those institutions then kept Europe divided long after the invaders stopped coming. Tilly’s city-states and Hoffman’s papacy are consequences of the first-millennium collapse as much as causes of what followed.

§7 · Conclusion

Political centralization was stable in China and unstable in Europe, and the difference paid off in opposite directions on different time horizons. Unity was efficient in the short run — no wasteful arms race, lighter taxes, faster growth. Fragmentation was robust in the long run.

The start-stop character of growth under empire — long expansions erased by catastrophic contractions — is offered as one route into the larger puzzle: why the most populous economy in the world came within a hair’s breadth of modern growth and did not get there.