Even within contemporary territorial states, many governments leave large parts of their territories ungoverned by the state authority, or put it differently, governed indirectly by local intermediaries. In this paper, I examine a fundamental problem confronting rulers of almost all political regimes: how to project state’s central power over the whole territory, using evidence from Qing China’s southwest frontier (1661-1735). In contrast to China proper, which were wholly subjected to centralized bureaucratic control, the southwest frontier was primarily ruled indirectly through the pre-existing political institutions of native chieftains during the Qing Dynasty. Exploiting a natural experiment design based on the exogenous price shock of Japanese copper, which was the primary...[ Read more ]

Even within contemporary territorial states, many governments leave large parts of their territories ungoverned by the state authority, or put it differently, governed indirectly by local intermediaries. In this paper, I examine a fundamental problem confronting rulers of almost all political regimes: how to project state’s central power over the whole territory, using evidence from Qing China’s southwest frontier (1661-1735). In contrast to China proper, which were wholly subjected to centralized bureaucratic control, the southwest frontier was primarily ruled indirectly through the pre-existing political institutions of native chieftains during the Qing Dynasty. Exploiting a natural experiment design based on the exogenous price shock of Japanese copper, which was the primary source of Chinese mints, this study shows that the rising price of Japanese copper increased the Qing emperors’ incentive to replace the indirect rule of copper-endowed native chiefdoms with the centralized bureaucratic system. My findings supplement the literature on the indirect rule and state building by suggesting that any shocks or interventions which would increase the benefits of the direct rule would boost the state centralization.