IDEAS home Printed from https://ideas.repec.org/a/wly/ectrin/v28y2020i4p537-558.html
   My bibliography  Save this article

Household responsibility system and China's agricultural: Growth revisited: Addressing endogenous institutional change

Author

Listed:
  • Shengmin Sun
  • Qiang Chen

Abstract

The rise of the Household Responsibility System has been widely viewed as a significant contribution to China's agricultural growth. However, this empirical conclusion is rested upon a convenient but doubtful presumption that the process of institutional change, also known as decollectivization, is exogenous. We contribute to this literature by explicitly recognizing the endogeneity of institutional changes, and exploit exogenous variations in lagged weather shocks and initial fixed assets for consistent estimation. With improved data on irrigation, mechanization, weather and institutional changes in a provincial panel data during 1970–1987, the results of panel instrumental estimations reveal that the Household Responsibility System had a significantly positive effect on China's agricultural growth, which was larger than indicated by OLS estimates that suffer from adverse selection and attenuation biases.

Suggested Citation

  • Shengmin Sun & Qiang Chen, 2020. "Household responsibility system and China's agricultural: Growth revisited: Addressing endogenous institutional change," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 28(4), pages 537-558, October.
    • Handle: RePEc:wly:ectrin:v:28:y:2020:i:4:p:537-558
    DOI: 10.1111/ecot.12248
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecot.12248
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecot.12248?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Monica Martinez-Bravo & Gerard Padró i Miquel & Nancy Qian & Yang Yao, 2012. "Elections in China," NBER Working Papers 18101, National Bureau of Economic Research, Inc.
    2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    3. Lin, Justin Yifu, 1988. "The Household Responsibility System in China's Agricultural Reform: A Theoretical and Empirical Study," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 199-224, Supplemen.
    4. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
    5. Klaus Deininger, 2003. "Land Policies for Growth and Poverty Reduction," World Bank Publications - Books, The World Bank Group, number 15125.
    6. Justin Yifu Lin, 1991. "Education and Innovation Adoption in Agriculture: Evidence from Hybrid Rice in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 713-723.
    7. Louis Putterman, 1988. "People's Republic of China: Systemic and Structural Change in a North China Township," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 423-430.
    8. Justin Yifu Lin, 1987. "The Household Responsibility System Reform in China: A Peasant's Institutional Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 410-415.
    9. Shenggen Fan, 1991. "Effects of Technological Change and Institutional Reform on Production Growth in Chinese Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 266-275.
    10. Leight, Jessica, 2016. "Reallocating wealth? Insecure property rights and agricultural investment in rural China," China Economic Review, Elsevier, vol. 40(C), pages 207-227.
    11. Huang, Jikun & Rozelle, Scott, 1996. "Technological change: Rediscovering the engine of productivity growth in China's rural economy," Journal of Development Economics, Elsevier, vol. 49(2), pages 337-369, May.
    12. Dong, Xiao-yuan & Dow, Gregory K, 1993. "Monitoring Costs in Chinese Agricutural Teams," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 539-553, June.
    13. Erica Field, 2007. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1561-1602.
    14. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
    15. Chung, Jae Ho, 2000. "Central Control and Local Discretion in China: Leadership and Implementation during Post-Mao Decollectivization," OUP Catalogue, Oxford University Press, number 9780198297772.
    16. Bai, Ying & Kung, James Kai-sing, 2014. "The shaping of an institutional choice: Weather shocks, the Great Leap Famine, and agricultural decollectivization in China," Explorations in Economic History, Elsevier, vol. 54(C), pages 1-26.
    17. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
    18. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    19. Bramall, Chris, 2000. "Sources of Chinese Economic Growth, 1978-1996," OUP Catalogue, Oxford University Press, number 9780198296973.
    20. Kung, James Kai-Sing & Chen, Shuo, 2011. "The Tragedy of the Nomenklatura: Career Incentives and Political Radicalism during China's Great Leap Famine," American Political Science Review, Cambridge University Press, vol. 105(1), pages 27-45, February.
    21. Alain de Janvry & Kyle Emerick & Marco Gonzalez-Navarro & Elisabeth Sadoulet, 2015. "Delinking Land Rights from Land Use: Certification and Migration in Mexico," American Economic Review, American Economic Association, vol. 105(10), pages 3125-3149, October.
    22. Hehui Jin & Yingyi Qian, 1998. "Public Versus Private Ownership of Firms: Evidence from Rural China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 773-808.
    23. Wei Li & Dennis Tao Yang, 2005. "The Great Leap Forward: Anatomy of a Central Planning Disaster," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 840-877, August.
    24. Macours, Karen & Janvry, Alain de & Sadoulet, Elisabeth, 2010. "Insecurity of property rights and social matching in the tenancy market," European Economic Review, Elsevier, vol. 54(7), pages 880-899, October.
    25. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
    26. Arellano, M, 1987. "Computing Robust Standard Errors for Within-Groups Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 431-434, November.
    27. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Books, National Bureau of Economic Research, Inc, number abra56-1.
    28. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    29. Fan, Shenggen & Zhang, Xiaobo, 2002. "Production and Productivity Growth in Chinese Agriculture: New National and Regional Measures," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 819-838, July.
    30. Feder, Gershon & Onchan, Tongroj & Chalamwong, Yongyuth, 1988. "Land Policies and Farm Performance in Thailand's Forest Reserve Areas," Economic Development and Cultural Change, University of Chicago Press, vol. 36(3), pages 483-501, April.
    31. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Chapters, in: Resource and Output Trends in the United States since 1870, pages 1-23, National Bureau of Economic Research, Inc.
    32. Scott Rozelle & Johan F.M. Swinnen, 2004. "Success and Failure of Reform: Insights from the Transition of Agriculture," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 404-456, June.
    33. Jiahua Che & Yingyi Qian, 1998. "Insecure Property Rights and Government Ownership of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 467-496.
    34. Kung James Kaising, 1993. "Transaction Costs and Peasants' Choice of Institutions: Did the Right to Exit Really Solve the Free Rider Problem in Chinese Collective Agriculture?," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 485-503, June.
    35. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Limin Du & Zhenhao Lai & Jinchuan Shi & Zheng Wang, 2024. "Comrades from the town: How did a factory‐commune pairing policy during the Send‐Down Movement propel rural industrialization in China?," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(1), pages 25-47, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shengmin Sun & Qiang Chen, 2014. "Measuring the Effects of Decollectivization on China's Agricultural Growth: A Panel GMM Approach, 1970-1987," SDU Working Papers 2014-05, School of Economics, Shandong University.
    2. Xu, Huayu, 2021. "The long-term health and economic consequences of improved property rights," Journal of Public Economics, Elsevier, vol. 201(C).
    3. Thomas Vendryes, 2014. "Peasants Against Private Property Rights: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 971-995, December.
    4. Bai, Ying & Kung, James Kai-sing, 2014. "The shaping of an institutional choice: Weather shocks, the Great Leap Famine, and agricultural decollectivization in China," Explorations in Economic History, Elsevier, vol. 54(C), pages 1-26.
    5. Besley, Timothy & Ghatak, Maitreesh, 2010. "Property Rights and Economic Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4525-4595, Elsevier.
    6. Alain de Janvry & Kyle Emerick & Marco Gonzalez-Navarro & Elisabeth Sadoulet, 2015. "Delinking Land Rights from Land Use: Certification and Migration in Mexico," American Economic Review, American Economic Association, vol. 105(10), pages 3125-3149, October.
    7. Lu, Yi & Luan, Mengna & Sng, Tuan-Hwee, 2020. "Did the communists contribute to China’s rural growth?," Explorations in Economic History, Elsevier, vol. 75(C).
    8. Aragón, Fernando M., 2015. "Do better property rights improve local income?: Evidence from First Nations' treaties," Journal of Development Economics, Elsevier, vol. 116(C), pages 43-56.
    9. Jérémie GIGNOUX & Karen MACOURS & Liam WREN-LEWIS, 2015. "Impact of land administration programs on agricultural productivity and rural development: existing evidence, challenges and new approaches," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(3), pages 467-498.
    10. Vranken, Liesbet & Macours, Karen & Noev, Nivelin & Swinnen, Johan F.M., 2007. "Property Rights Imperfections, Asset Allocation, and Welfare: Co-Ownership in Bulgaria," 104th Seminar, September 5-8, 2007, Budapest, Hungary 7795, European Association of Agricultural Economists.
    11. Ayalew, Hailemariam & Admasu, Yeshwas & Chamberlin, Jordan, 2021. "Is land certification pro-poor? Evidence from Ethiopia," Land Use Policy, Elsevier, vol. 107(C).
    12. Muñoz-Mora, Juan Carlos & Tobón, Santiago & d’Anjou, Jesse Willem, 2018. "The role of land property rights in the war on illicit crops: Evidence from Colombia," World Development, Elsevier, vol. 103(C), pages 268-283.
    13. Zhao, Xiaoxue, 2020. "Land and labor allocation under communal tenure: Theory and evidence from China," Journal of Development Economics, Elsevier, vol. 147(C).
    14. Subramanian, Arjunan & Kumar, Parmod, 2024. "Property rights, factor allocation and household welfare: Experimental evidence from a land titling program in India," Journal of Development Economics, Elsevier, vol. 167(C).
    15. Ke Li & Shuntian Yao & Lei Yu, 2009. "Community Property Auction, Nash Bidding Rule And China'S Rural Economic Reform," Pacific Economic Review, Wiley Blackwell, vol. 14(5), pages 682-693, December.
    16. Gao, Xuwen & Shi, Xinjie & Fang, Shile, 2021. "Property rights and misallocation: Evidence from land certification in China," World Development, Elsevier, vol. 147(C).
    17. Agyei-Holmes,Andrew & Buehren,Niklas & Goldstein,Markus P. & Osei,Robert Darko & Osei-Akoto,Isaac & Udry,Christopher Robert, 2020. "The Effects of Land Title Registration on Tenure Security, Investment and the Allocation of Productive Resources : Evidence from Ghana," Policy Research Working Paper Series 9376, The World Bank.
    18. Xu, Zhun, 2017. "Decollectivization, Collective Legacy, and Uneven Agricultural Development in China," World Development, Elsevier, vol. 98(C), pages 290-299.
    19. Ramírez-Álvarez, Aurora Alejandra, 2019. "Land titling and its effect on the allocation of public goods: Evidence from Mexico," World Development, Elsevier, vol. 124(C), pages 1-1.
    20. A. Patrick Behrer & Edward L. Glaeser & Giacomo A. M. Ponzetto & Andrei Shleifer, 2021. "Securing Property Rights," Journal of Political Economy, University of Chicago Press, vol. 129(4), pages 1157-1192.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ectrin:v:28:y:2020:i:4:p:537-558. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)2577-6983 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.