Abstract:

Reviewing Professor Cao Zhenghan's research, this article develops a theoretical model to explain the history of state centralization and decentralization in China, and emphasizes that conceptual and logical analysis is helpful to understand this kind of organizational phenomena. We comment that it is not appropriate to place risk theory and efficiency theory in opposition; rather, it is much more necessary to distinguish the kind of governance, efficiency, and efficient individuals. This paper analyzes the relationship between the efficiency of governance with political risks and the efficiency of daily administration, and discusses the maximum efficiency of daily administrative governance, and the behavioral choices if political risks are minimized. It examines the concepts of over-centralization and over-decentralization, and emphasizes the significance of efficiency distinction in understanding the phenomenon of non-equilibrium separatism in Chinese history. This paper also points out that it is necessary to illustrate the governances both within and beyond the border of the ruler's power. Under certain conditions the decentralization will lead to further decentralization; centralization will lead to further centralization.