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FUKUYAMA: So you have to understand what that means. China
didn’t create the first state, it created the first modern state, meaning a
state which recruited people into a centralized bureaucracy based on
talent and merit, essentially, and not based on family relations, or
connections to the household of the emperor, or something of that
sort. So it had a modern form of public administration. And this was
all consolidated by the third century B.C. But what the country never
got to was the rule of law. Up to the modern day, the concept of a
sovereign being limited by the rule of law never existed. So what that
meant is that at a very early period in their history, the Chinese
perfected strong, absolutist government. And that’s been a consistent
pattern — high-quality, authoritarian government. And I think that
continues up to the present.

SHAFFER: Could we trace Western ascendance to that one factor,
the rule of law?

FUKUYAMA: That’s what’s interesting about the present period. A
lot of economic theory says you can’t have modern economic growth
without Western-style rule of law. Economists who believe this are
thinking about two critical things — property rights and contract
enforcement. And there’s a lot of theory and a lot of empirical
evidence that show that these are in fact important. The problem with
that theory is that it doesn’t really square with the facts in
contemporary China. As everybody knows, for the past three decades,
China has been growing at double-digit rates and they don’t have
Western rule of law.

I think you can rescue the theory in the long run, because without
rule of law they can’t keep this up. In a way the challenge that
contemporary China poses it that they are doing well, and in the short

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