Commune Kabuki: Development and Productivity Growth under Maoist China's Rural Collectives

The key question for a developing country with a fast‐growing population is how to increase savings rates and make productive investments that take advantage of high returns to capital. This study demonstrates that after the disastrous Great Leap Forward (1958–1961), China's commune system administered a nationwide agricultural modernization programme that was able to deliver continuous robust increases in agricultural productivity throughout the 1970s. Through the extraction of household savings primarily via the workpoint remuneration system, China's communes impoverished the local populace while funding investments that increased agricultural production. The workpoint remuneration system constituted a ‘kabuki theatre’ that used countless meetings about job allocations, work evaluations, and the exchange of points for cash or grain to draw members’ attention away from the extraction of their savings and towards the size of their own portion relative to other workers. China's research and extension system, which was nested into the commune and its sub‐units, prioritized locally appropriate capital investments and technical innovations that were both labour‐ and land‐saving. These two systems worked together to extract an increasing percentage of household savings and underwrite investments in productive capital and technology that produced a decade of rapid increases in food output.