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Market Integration and Economic Development: A Long‐run Comparison

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  • Wolfgang Keller
  • Carol H. Shiue

Abstract

How much of China’s recent economic performance can be attributed to market‐oriented reforms introduced in the last two decades? A long‐run perspective may be important for understanding the process of economic development occurring today. This paper compares the integration of rice markets in China today and 270 years ago. In the eighteenth century, transport technology was non‐mechanized, but markets were close to being free. We distinguish local harvest and weather from aggregate sources of price variation in a historical sample and in a similarly constructed contemporary sample. Findings indicate the degree of market integration in the 1720s is a very good predictor of per capita income in the 1990s. Moreover, the current pattern of interregional income in China is strongly linked to persistent geographic factors that were already apparent several centuries ago, well before the enactment of modern reform programs.

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  • Wolfgang Keller & Carol H. Shiue, 2007. "Market Integration and Economic Development: A Long‐run Comparison," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 107-123, February.
    • Handle: RePEc:bla:rdevec:v:11:y:2007:i:1:p:107-123
    DOI: 10.1111/j.1467-9361.2007.00359.x
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    Cited by:

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    2. Liu, Bo & Keyzer, Michiel & van den Boom, Bart & Zikhali, Precious, 2012. "How connected are Chinese farmers to retail markets? New evidence of price transmission," China Economic Review, Elsevier, vol. 23(1), pages 34-46.
    3. Qinghua Zhang & Heng-fu Zou, 2012. "Regional Inequality in Contemporary China," Annals of Economics and Finance, Society for AEF, vol. 13(1), pages 113-137, May.
    4. Wannaphong Durongkaveroj, 2024. "Trade openness and the growth-poverty nexus: Reappraisal with a new openness indicator," Departmental Working Papers 2024-7, The Australian National University, Arndt-Corden Department of Economics.
    5. Wolfgang Keller & Ben Li & Carol H. Shiue, 2011. "China’s Foreign Trade: Perspectives From the Past 150 Years," The World Economy, Wiley Blackwell, vol. 34(6), pages 853-892, June.
    6. Fan Duan & Bulent Unel, 2019. "Persistence of cities: Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 23(2), pages 663-676, May.
    7. Haiwen Zhou, 2009. "Population Growth And Industrialization," Economic Inquiry, Western Economic Association International, vol. 47(2), pages 249-265, April.
    8. Chao Li & John Gibson, 2013. "Spatial Price Differences and Inequality in China: Housing Market Evidence," Working Papers in Economics 13/06, University of Waikato.
    9. Gugissa, Desalegn A. & Ingenbleek, Paul T.M. & van Trijp, Hans C.M., 2021. "Market knowledge as a driver of sustainable use of common-pool resources: A lab-in-the-field study among pastoralists in Ethiopia," Ecological Economics, Elsevier, vol. 185(C).
    10. Masaki Nakabayashi, 2014. "Special Issue: Issues in Asia. Guest Editor: Laixun Zhao," Review of Development Economics, Wiley Blackwell, vol. 18(2), pages 254-271, May.
    11. Hongjun Zhao, 2016. "American Silver Inflow and the Price Revolution in Qing China," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 294-305, February.
    12. Chao Li & John Gibson, 2014. "Spatial Price Differences and Inequality in the People's Republic of China: Housing Market Evidence," Asian Development Review, MIT Press, vol. 31(1), pages 92-120, March.
    13. Jeffrey S. Zax & Yin He, 2016. "The Law Of One Price In Chinese Factor Markets," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-31, September.

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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General

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