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Central Planning Legacies: The Lingering Effects Of The Great Leap Forward In China

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  • Qichun He
  • Meng Sun

Abstract

type="main"> The Great Leap Forward (GLF) (1958–61) in China was a natural experiment that removed private property rights to achieve rapid growth via central planning, producing immediate famine and death. Using three measures for the GLF, we find that it still exerts a significant negative effect on output per worker in 2004 across Chinese provinces. This result is robust to the use of political factors from the GLF period as instruments. The causal relationship persists after controlling for climate conditions and initial output per capita. Moreover, the causal relationship exists when we change the dependent variable to output per worker in 1978, which refutes the notion that market-oriented reforms alone explain the difference in income in 2004. Therefore, the GLF has had a lasting, negative effect on output.

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  • Qichun He & Meng Sun, 2016. "Central Planning Legacies: The Lingering Effects Of The Great Leap Forward In China," Bulletin of Economic Research, Wiley Blackwell, vol. 68(2), pages 182-203, April.
  • Handle: RePEc:bla:buecrs:v:68:y:2016:i:2:p:182-203
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    File URL: http://hdl.handle.net/10.1111/boer.12034
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    Cited by:

    1. Qichun He & Heng-fu Zou, 2018. "The Kuznets Curve on Income Distribution Does Not Hold in China: A Critical Assessment," CEMA Working Papers 607, China Economics and Management Academy, Central University of Finance and Economics.

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