A Note on the Similarities and Differences A Note on the Similarities and Differences between Chinese Guanxi-Networks and Korean Yongo-Networks 21st Century Human Value Forum Andong, 29. Mai 2015 Prof. Dr. Markus Taube

Informal Social Networks Are they all the same? Markus Taube – University of Duisburg-Essen

Space for Variety: Parameters for Idiosyncratic Network Design Markus Taube – University of Duisburg-Essen

Markus Taube – University of Duisburg-Essen guanxi- and yongo-Networks Common Ground: Reciprocity and Club-Characteristics Cooperative behavior becomes the dominant strategy in one-period games (unique transaction between club members) since these unique games are bound up in an iterative system of multiple games (transactions) with other club members. The fast flow of information among network members is crucial for the ordering mechanism to work efficiently. Markus Taube – University of Duisburg-Essen

guanxi- and yongo-Networks Core Difference: Tie-base Identity – Perceived Similarity guanxi networks are in principle based on personal relations marked by specific identity creating elements which are either “natural” or “created”: - origin in the same village or region, - served in the same military unit, - belonging to the same party unit, - graduated from the same school, - same experiences in life and/or work - friendship and acquaintance - overlap of friends and acquantances etc. Identity – Naturally Determined Segregation yongo networks are pre-defined, “natural” structures into which individuals are born. There is hardly any possibility of conscious, goals-oriented yongo-”creation”: - hyulyon family and blood ties - jiyon ties based on same hometown - hakyon ties based on attending the same educational institution (at the same time or not) guanxi yongo Markus Taube – University of Duisburg-Essen

guanxi- and yongo-Networks Differing Architectures: Network Character Egocentric network architecture Decentralized network architecture Markus Taube – University of Duisburg-Essen

Markus Taube – University of Duisburg-Essen guanxi- and yongo-Networks Differing Functionalities: Network Principle Utilitarian – Purpose-based guanxi-networks are not simply ‘brotherhoods of friends’ bound by loyal friendship and free of any economic interest. It is rather the mutual exchange of services and the acceptance of abstract debt obligations that provides the main integrating force within a guanxi-network. Outsiders are discriminated against, but not alienated as they are potential new network members -> Weak particularism! Immutable and Irreversible – Cause-based yongo relationships are not purpose-based by nature but rather conventional social relationships individuals are born into Cooperation and the provision of services to co-network-members is a natural obligation and independent from any bilateral credit/debt balances Outsiders are strictly discriminated against. They cannot become network members in the future. -> Strong particularism! guanxi yongo Markus Taube – University of Duisburg-Essen

Markus Taube – University of Duisburg-Essen guanxi- and yongo-Networks Further Differences: Openness – External Bridging yongo-networks are rigid. They are based on life-long lasting “natural” relationships. An existing set of network-relations does not change in the course of time. There exists virtually no possibility to establish formal bridges/alliances with other yongo-networks. However, the three dimensions HHJ may allow for overlaps and cross-network links guanxi-networks are amorphous. The reach of a guanxi- network can be expanded by the inclusion of new members as well as shrunk by neglect of network relations or expulsion. Bridges/alliances with other guanxi- networks are possible. Markus Taube – University of Duisburg-Essen

guanxi- and yongo-Networks Towards the future – Open Questions Given their significant structural differences as well as varying roles in society and economy, in which direction will guanxi- und yongo- networks develop in the coming years? Are changes in the external environment (rising economic complexity and fragmentation; growing individualisation, etc.) impacting on the viability of these networks? What importance does the functional value of network-transactions play? How strong is the social embeddedness of these networks and in how far will this determine their prevalence in changing societies? Markus Taube – University of Duisburg-Essen

Markus Taube – University of Duisburg-Essen Mercator School of Management IN-EAST, Institute for East Asian Studies Chair of East Asian Economic Studies / China Prof. Dr. Markus Taube markus.taube@uni-due.de Markus Taube – University of Duisburg-Essen 10