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Incentive Effects of Price Rises and Payment-System Changes on Chinese Agricultural Productivity Growth


  • John McMillan
  • John Whalley
  • Zhu Li Jing


This paper analyzes the relative importance of the major factors underlying the post-1978 increase in China's agricultural productivity. We present a method for assessing the role of price increases and strengthened individual incentives due to the introduction of the responsibility system. Data on pre- and post-1978 Chinese agricultural performance are used to calculate incentive indices, giving the fraction of their marginal product that peasants received under the pre-1978 regime.

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  • John McMillan & John Whalley & Zhu Li Jing, 1987. "Incentive Effects of Price Rises and Payment-System Changes on Chinese Agricultural Productivity Growth," NBER Working Papers 2148, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2148
    Note: ITI IFM

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    References listed on IDEAS

    1. 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.
    2. Macrae, John, 1977. "Production, distribution and economic organization : Income distribution and resource allocation at the team level in rural China," Journal of Development Economics, Elsevier, vol. 4(4), pages 365-385, November.
    3. Xavier Freixas & Roger Guesnerie & Jean Tirole, 1985. "Planning under Incomplete Information and the Ratchet Effect," Review of Economic Studies, Oxford University Press, vol. 52(2), pages 173-191.
    4. Stiglitz, Joseph E, 1976. "The Efficiency Wage Hypothesis, Surplus Labour, and the Distribution of Income in L.D.C.s," Oxford Economic Papers, Oxford University Press, vol. 28(2), pages 185-207, July.
    5. Oliver Hart & Bengt Holmstrom, 1986. "The Theory of Contracts," Working papers 418, Massachusetts Institute of Technology (MIT), Department of Economics.
    6. Theodore Groves & John O. Ledyard, 1985. "Incentive Compatibility Ten Years Later," Discussion Papers 648, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Nicholas R. Lardy, 1986. "Prospects and Some Policy Problems of Agricultural Development in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(2), pages 451-457.
    8. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
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