Tyler Cowen had a great post on the government's incentives in this stage of China's development, it's worth a read. [1] > But recall that the “citizen trust c

Tyler Cowen had a great post on the government's incentives in this stage of China's development, it's worth a read. [1] > But recall that the “citizen trust contract” with policymakers is ultimately a fragile one and based on a series of quite short-term evaluations. When the tailwinds are less positive, the policymakers must take on a much shorter time horizon. They will prop up stock prices now, or try to, even if that is foolish. … > The same leadership structure can perform either very well or very poorly, with both the same leaders and the same citizens. And the switch can come fairly quickly, and be occasioned by events which are significant but not transformative on a world-historic or even a country-historic scale. [1] http://marginalrevolution.com/marginalrevolution/2015/07/a-very-particular-theory-of-political-leadership.html http://marginalrevolution.com/marginalrevolution/2015/07/a-v...