ABSTRACT
What happened to China after around 1820 up to 1950 is a conundrum that has attracted much controversy among historians and economists. Why did the East and the West, more specifically for our purpose China and Western Europe, have diverging trajectories from the early nineteenth century to the mid-twentieth century? Why did the industrial revolution that propelled Anglo-Saxon countries to economic dominance occur at all? Why did China miss it? What is the nature of the restraints on industrialization that were unsurpassable obstacles in some societies yet overcome in others? Did the dramatic divergence derive from state policies or from basic social institutions that shaped incentives, aspirations, and entrepreneurial spirits?
