Making Sense of Institutional Change in China : The Cultural Dimension of Economic Growth and Modernization

Building on a new model of institutions proposed by Aoki and the systemic approach to economic civilizations outlined by Kuran, this paper attempts an analysis of the cultural foundations of recent Chinese economic development. I argue that the cultural impact needs to be conceived as a creative process that involves linguistic entities and other public representations, providing integrative meaning to economic interactions and identities to different agents involved. I focus on the phenomenon of localism in China, which I relate to other cultural phenomena, in particular networks, culturalism and modernism. Thus, economic modernization is a cultural phenomenon on its own sake. I summarize these interactions in a process analysis based on Aoki's framework, which identifies specific forms of cultural causality