In the last four decades, economic reforms in China have fueled extraordinary growth and increased incomes across the distribution. However, the gains weren’t experienced equally: over the same four decades, income inequality soared.
Stone Center Postdoctoral Scholar Zhexun Mo, an economist whose research focuses on the intersection of political economics, development, and economic history, recently contributed two papers to the Stone Center Working Paper Series that focus on perceptions of inequality and redistribution in China. “Reform Windfall as Redistribution: A Survey Experiment on Redistributive Preferences in Contemporary China” — which was coauthored with Margot Belguise, Nora Yuqian Chen, and Yuchen Huang, and was just published by the European Journal of Political Economy — analyzes the Chinese public’s support for the redistribution of wealth gained through economic reforms. “Non-Meritocrats or Choice-Reluctant Meritocrats? A Redistribution Experiment in China and France,” written with Belguise and Huang, involved an incentivized redistribution experiment with university students in China and France, and uncovered the underlying mechanisms that explain why Chinese participants, on the surface, seem less meritocratic in their redistribution choices compared to their French counterparts.
In this interview, Mo discusses the two papers and his path to inequality research at the Stone Center.
What was the goal of your paper on “Reform Windfall as Redistribution”?
Mo: We wanted to understand how the Chinese people reason about redistribution against the backdrop of increasing economic inequalities in China. Do Chinese people accept inequality, or are they averse to it, given the country’s egalitarian communist legacy? That was our starting point, and we did a small pilot for our first study in 2021. We found that when we primed our respondents with representative ways of getting rich in the 1990s and 2000s reform era — relatively less merit-based ways of getting rich, and more luck-based, whether it was through housing speculation or compensation for the demolition of your old houses, or inheriting a family firm — the respondents’ support for redistribution was significantly reduced.
This was a bit counterintuitive. It’s usually expected that when you tell respondents stories of people getting rich in relatively unmeritocratic ways, the respondents’ support for redistribution increases, because the wealth is undeserved and should be taken away. But we observed the opposite in China. That was why we conducted a larger sample analysis in 2024, in which we increased the sample size of both the treatment and control group to 1,000 individuals from 250. And we found exactly the same results.
We also added a few more questions to understand the potential mechanism behind these results. And we found that respondents were perceiving the reform era ways of getting rich as redistribution in itself. Respondents who were treated with stories of people getting rich were more likely to think that reforms have benefited [people like] them, and that economic reforms in China over the past four decades have benefitted individuals who were previously poor. The stories were seen as scenarios of individuals who were previously stuck in a poverty trap, and the economic reforms enabled them to become rich. From the point of view of the Chinese respondents to our survey, the reforms were a form of redistribution. As such, when we ask policy questions about the government’s responsibility to reduce the income gap in China, they are less in favor of that, because they think de facto redistribution has already been achieved by the economic reforms.
So even though these economic windfalls weren’t aimed at redistribution, they were seen as accomplishing that goal?
Mo: Yes, exactly. And I think this is very specific to China or, in a larger sense, specific to transition economies that are experiencing economic liberalization, transitioning from a planned economy in which all the inequalities are structural or determined by politically engineered social structures. Although during the initial phases of enrichment there’s a lot of random luck, there’s also a lot of unforeseen historical opportunities. But, especially given this abundance of randomness, whatever ways people have of getting rich — as long as they’re not determined by political connections or by very rigid structural inequalities, as in the past — then those ways are regarded as deserving, and as playing the role of redistribution, in a way.
What do you see as the policy implications of your findings?
Mo: There’s a lot of scholarly push in China right now to tax the rich more to implement redistribution, because there’s too much inequality and we should have the same kinds of tax and transfer systems that the West does. But the way Chinese people think about redistribution is very different than in the West. Our message is that redistribution might not necessarily need to happen in a tax and transfer manner. Especially in countries like China or in other developing economies that are fast-growing, that are transitioning from a very structured planned economy to a market economy, it might be important to consider how people think about economic growth and redistribution at the same time.
Focusing on how to distribute the existing pie might not be the best strategy. Our recommendation, based on our findings, is that there should be more emphasis on growth itself, and on how to optimize growth or make growth itself more inclusive. To make the distribution of wages — rather than redistribution — more egalitarian, so that people are receiving higher salaries or a better payment for their work.
What we observe in our experiment is that people think that individuals getting rewarded in the economic growth process itself — that kind of distribution — is much more important than directly taking money away from the rich to give to the poor.
Does your paper on “Non-Meritocrats or Choice-Reluctant Meritocrats” overlap with those findings?
Mo: Findings from a wave of recent cross-country surveys suggested that Chinese people were somewhat unmeritocratic and inequality-loving: When running large cross-country surveys, researchers found that Chinese individuals did not respond differently to inequalities that were determined by effort and inequalities determined by luck. Whether inequality was due to effort or luck, the Chinese respondents chose to redistribute equally little. So the researchers’ conclusion is that Chinese citizens are very libertarian and inequality-loving. We wanted to better understand how Chinese respondents regard luck, and whether that’s necessarily due to their fairness preferences — in that sense, this study is connected to our other paper.
In this study, we find that the way the Chinese respondents respond to luck-based inequalities is not really due to fairness preferences or to people’s acceptance of merit versus luck. It’s more due to another kind of mechanism that makes Chinese people appear, on the surface, to be inequality loving. In the kind of lab setting where incentivized behavioral games are employed to measure the willingness to redistribute, which is prevalent and somewhat standardized in this strand of literature, we find that Chinese people display a very strong reluctance to make a choice that can impact other people’s lives, and we label that as status quo conformity — or “choice reluctance;” in our paper; the two terms are used interchangeably.
Basically, Chinese individuals conform to the status quo that is presented to them, especially when changing the status quo involves affecting other people’s payoffs in real life. We did a randomized experiment with Chinese and French respondents, and we randomized the status quo. And we found in the Chinese sample, when they’re assigned a particular status quo, they adhere to it. That’s the case when the status quo is extremely unequal or when it’s extremely equal. We do not see Chinese individuals engaging in redistribution, regardless of the status quo that is assigned to them.
If we look only at the unequal status quo, the conclusion can easily be that the Chinese respondents are inequality-loving and do not want to redistribute. But then if we look at the equal status quo, we can conclude that they’re equality-loving. In fact, they’re just not willing to change the status quo, and I think this completely changes the policy implications about how we think Chinese respondents perceive inequalities that have, say, social norm constraints or other kind of moral constraints.
Our interpretation is that this has to do mostly with a cultural difference. The French respondents did not show this kind of status quo conformity at all. They are equality-loving. And in China, people do not want to make a choice. They do not want to take that responsibility. That is the cultural aspect of Chinese people’s values that we think is at play here in these experiments.
What do you see as the policy implications of your study, compared to previous research on this topic?
Mo: We find that the Chinese respondents are meritocratic, if we take into account status quo conformity. If we exclude all those individuals who do not make any redistribution decisions — individuals who conform to the status quo — then the remaining Chinese respondents behave very meritocratically in the redistribution games. They redistribute more when the inequalities are more due to luck, and they redistribute less when the inequalities are due to merit.
The policy implications of previous research on this topic might be: Chinese people are libertarians, and any policies that the government might want to implement to reduce inequality might receive a lot of pushback. But our conclusion is that people might be supportive of a tax on the super-rich — which has been very hotly debated in China over the past few years — but that it has to be framed or perhaps orchestrated in a way that overcomes this conformity issue. Perhaps people need to be reminded that in a society in which you live as a community, you shouldn’t care only about your own interests. Some individuals don’t want to take responsibility for interfering with other people’s lives. But if we remind Chinese people that inequality can happen if they do nothing, and that increasing inequality might affect them negatively, then they might become more supportive of policies of taxing the rich.
You mentioned taking aside the Chinese respondents who favored conformity. What percentage were they of the total respondents?
Mo: Our sample included only elite university students. We’re now trying to do a follow-up with a nationally representative sample. But what we found with the university students, there’s one type of person that we label as the most conformist, in that they don’t make any moves in any redistribution decisions. And we found that to be around 20% of our sample of Chinese respondents.
That is actually pretty high. In the French sample, there were virtually no people — fewer than 1% — who were always conformist.
How did you become interested in these specific research questions?
Mo: I’ve always been super interested in inequality studies, in general, and distributional aspects has been a focus of my intellectual inquiries ever since I wanted to do a Ph.D. And China is a very interesting case study, because it has grown so much over the past four decades. The focus has mostly been on growth itself: how to grow the pie larger. But the growth was accompanied by extremely large inequalities. Objectively speaking, we observe that the top 10% income share in China, for instance, increased by 100% over the past four decades. And this is an extremely large increase. At the same time, what drew my attention is that there hasn’t been much public dissatisfaction or anxiety or protests against this rising inequality. I basically wanted to understand: how do people perceive inequalities in China these days, given that inequalities are not really decreasing? They increased for four decades and plateaued in the past five to 10 years, but they’re still at a very high point. Wanting to understand how people reason about distributional questions, how they perceive inequalities, was the starting point for these two papers.
And what brought you to inequality studies, more generally?
Mo: I was initially extremely interested in economic development. I was born in the early 1990s, and I witnessed this tremendous change in the Chinese economy. A lot of growth was happening when I was growing up, and that was when I first got interested into economics. I wanted to study development economics, and to understand why some countries got poor and others got rich. What are the main factors behind that? But when I was approaching this development discipline of economics, I found that a lot of the times the questions I was asking were more about distribution. It was more about how resources are getting into the hands of some people versus others.
Inequality and growth: somehow, you cannot really disentangle the two. And there was a resurgence of inequality research in the entire economics discipline around the early 2010s. As an undergrad I read Branko’s book Global Inequality. So my intention gradually drifted from growth and development economics to more distributional questions.
I would say that I’m still interested in understanding my initial inquiry: why some countries are poor and others are rich, which is essentially an inequality question. It’s understanding cross-country inequalities. And within-country inequalities — those are two sides of the same coin and they’re about development, about growth, and also about distribution. I think they’re all interconnected.
Read the Papers: