Chinese-Foreigners Disputes and the Emergence of Judicial Autonomy in Historical China

Abstract

This study examines the emergence and economic consequence of a modern legal system within a traditional society by investigating a specific historical context: the development of an independent judiciary in China during the early 20th century. We focus on a judicial reform initiated in 1906, which aimed to introduce a modern legal framework to resolve disputes between Chinese citizens and foreigners which had increased dramatically since 1840s. The reform was marked by a conscious establishment of an independent judiciary that was separated from the executive branch – the first time in Chinese history – resulting in the establishment of independent courts, albeit with varying degrees of success across space and over time. Using a unique dataset constructed from newspaper reports on disputes between Chinese and foreigners, we find that prefectures beset with more frequent disputes were more inclined to set up a modern court system. In addition, when compared to government departments that remained unreformed and where the executive branch continued to adjudicate disputes, the modern courts demonstrated greater efficiency in handling legal cases. Furthermore, prefectures that implemented judicial reforms typically saw accelerated economic growth relative to those that did not. Our findings highlight that the pressing need to address escalating new-formed conflicts is a key driving force for the adoption of modern legal institutions within a traditional society.