Doomed to fail? Legitimacy crisis and the fiscal-military state in Republican China

This paper examines how the persistent legitimacy crisis in Republican China (1912–1937) prevented a sustainable fiscal-military nexus. During the Warlord Period, a legitimacy vacuum fostered coercive, high-risk bank lending. While the Nanjing Government’s nascent legitimacy initially unlocked bank capacity for state-building, this support proved fragile, collapsing as the regime’s own legitimacy eroded. Through a comparative analysis of the politically-connected Kincheng Bank and the commercially-oriented Shanghai Commercial and Savings Bank, this study presents a ‘failure narrative’ for the classic fiscal-military state theory. It contends that without a foundation of political legitimacy, the interplay of coercion and capital does not build state capacity but instead creates a destructive cycle of predatory extraction and financial instability.