IDEAS home Printed from https://ideas.repec.org/p/pri/econom/2016-8.html
   My bibliography  Save this paper

Information Distortion in Hierarchical Organizations: A Study of China’s Great Famine

Author

Listed:
  • Ziying Fan

    (Shanghai University of Finance and Economics)

  • Wei Xiong

    (Princeton University)

  • Li-An Zhou

    (Peking University)

Abstract

The literature has attributed China's Great Famine of 1959-1961 to sharp declines in grain output caused by reduced peasant incentives and excessive grain procurement. We provide evidence to further connect these failures to information distortion inside the government system. Specifically, we document the following findings. First, local officials competed with each other in massive inflation of local grain yield in an effort to cater to Mao's wishful thinking about the Great Leap Forward. Second, as a result of the inflated yield inflation, the central government failed to realize the widespread famine and organize systematic famine relief until two years after the famine started. Third, during the first two years, the central government transferred a substantial amount of grain out of the provinces that experienced severe famine while local officials in these provinces redistributed grain back to peasants using locally controlled grain stock. By revealed "knowledge," the last finding illustrates the information gap between the central government and local officials at the peak of the famine. Overall, our analysis highlights severe consequences of information distortion induced by subordinates' incentives to cater to their superior's wishful thinking.

Suggested Citation

  • Ziying Fan & Wei Xiong & Li-An Zhou, 2016. "Information Distortion in Hierarchical Organizations: A Study of China’s Great Famine," Working Papers 2016-8, Princeton University. Economics Department..
  • Handle: RePEc:pri:econom:2016-8
    as

    Download full text from publisher

    File URL: http://wxiong.mycpanel.princeton.edu/papers/Famine.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lin, Justin Yifu, 1990. "Collectivization and China's Agricultural Crisis in 1959-1961," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1228-1252, December.
    2. Chang, Gene Hsin & Wen, Guanzhong James, 1997. "Communal Dining and the Chinese Famine of 1958-1961," Economic Development and Cultural Change, University of Chicago Press, vol. 46(1), pages 1-34, October.
    3. Lin, Justin Yifu & Yang, Dennis Tao, 2000. "Food Availability, Entitlements and the Chinese Famine of 1959-61," Economic Journal, Royal Economic Society, vol. 110(460), pages 136-158, January.
    4. 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.
    5. 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.
    6. 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).
    7. Douglas Almond & Lena Edlund & Hongbin Li & Junsen Zhang, 2007. "Long-Term Effects Of The 1959-1961 China Famine: Mainland China and Hong Kong," NBER Working Papers 13384, National Bureau of Economic Research, Inc.
    8. Dennis Tao Yang, 2008. "China's Agricultural Crisis and Famine of 1959–1961: A Survey and Comparison to Soviet Famines," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 50(1), pages 1-29, March.
    9. SHI, Xinzheng, 2011. "Famine, fertility, and fortune in china," China Economic Review, Elsevier, vol. 22(2), pages 244-259, June.
    10. Chen, Yuyu & Zhou, Li-An, 2007. "The long-term health and economic consequences of the 1959-1961 famine in China," Journal of Health Economics, Elsevier, vol. 26(4), pages 659-681, July.
    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. Zhou, Tao & Huang, Xuhui & Zhang, Ning, 2023. "The effect of innovation pilot on carbon total factor productivity: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 125(C).

    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. Li, Qiang & An, Lian, 2015. "Intergenerational health consequences of the 1959–1961 Great Famine on children in rural China," Economics & Human Biology, Elsevier, vol. 18(C), pages 27-40.
    2. Elizabeth Gooch, 2018. "Resistance is Futile? Institutional and Geographic Factors in China’s Great Leap Famine," HiCN Working Papers 266, Households in Conflict Network.
    3. Yared, Pierre & Qian, Nancy & ,, 2010. "The Institutional Causes of China's Great Famine, 1959-61," CEPR Discussion Papers 8012, C.E.P.R. Discussion Papers.
    4. Feng, Xunan & Johansson, Anders C., 2018. "Living through the Great Chinese Famine: Early-life experiences and managerial decisions," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 638-657.
    5. 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.
    6. Huang, Cheng & Phillips, Michael R. & Zhang, Yali & Zhang, Jingxuan & Shi, Qichang & Song, Zhiqiang & Ding, Zhijie & Pang, Shutao & Martorell, Reynaldo, 2013. "Malnutrition in early life and adult mental health: Evidence from a natural experiment," Social Science & Medicine, Elsevier, vol. 97(C), pages 259-266.
    7. Wenli Cheng & Hui Shi, 2019. "Surviving the Famine Unscathed? An Analysis of the Long‐Term Health Effects of the Great Chinese Famine," Southern Economic Journal, John Wiley & Sons, vol. 86(2), pages 746-772, October.
    8. Xin Meng & Nancy Qian, 2009. "The Long Term Consequences of Famine on Survivors: Evidence from a Unique Natural Experiment using China's Great Famine," NBER Working Papers 14917, National Bureau of Economic Research, Inc.
    9. Chen, Xiangpo & Hu, Xinyan & Xu, Jinhai, 2023. "When winter is over, its cold remains: Early-life famine experience breeds risk aversion," Economic Modelling, Elsevier, vol. 123(C).
    10. Gooch, Elizabeth, 2017. "Estimating the Long-Term Impact of the Great Chinese Famine (1959–61) on Modern China," World Development, Elsevier, vol. 89(C), pages 140-151.
    11. Mu, Ren & Zhang, Xiaobo, 2008. "Gender difference in the long-term impact of famine:," IFPRI discussion papers 760, International Food Policy Research Institute (IFPRI).
    12. Cheng, Yawen & Kong, Dongmin & Wang, Qin, 2023. "Parents' early experience and children's years of schooling: The long-term impact of son preference," China Economic Review, Elsevier, vol. 82(C).
    13. Loh, Chung-Ping A. & Li, Qiang, 2013. "Peer effects in adolescent bodyweight: Evidence from rural China," Social Science & Medicine, Elsevier, vol. 86(C), pages 35-44.
    14. Loren Brandt & Aloysius Siow & Carl Vogel, 2016. "Large Demographic Shocks And Small Changes In The Marriage Market," Journal of the European Economic Association, European Economic Association, vol. 14(6), pages 1437-1468, December.
    15. Seonghoon Kim & Quheng Deng & Belton M. Fleisher & Shi Li, 2010. "The Lasting Impact of Mothers’ Fetal Malnutrition on Their Offspring: Evidence from the China Great Leap Forward Famine," Working Papers 10-01, Ohio State University, Department of Economics.
    16. Seonghoon Kim & Belton Fleisher & Jessica Ya Sun, 2017. "The Long‐term Health Effects of Fetal Malnutrition: Evidence from the 1959–1961 China Great Leap Forward Famine," Health Economics, John Wiley & Sons, Ltd., vol. 26(10), pages 1264-1277, October.
    17. Xue Feng Hu & Gordon G. Liu & Maoyong Fan, 2017. "Long‐Term Effects of Famine on Chronic Diseases: Evidence from China's Great Leap Forward Famine," Health Economics, John Wiley & Sons, Ltd., vol. 26(7), pages 922-936, July.
    18. Gørgens, Tue & Meng, Xin & Vaithianathan, Rhema, 2012. "Stunting and selection effects of famine: A case study of the Great Chinese Famine," Journal of Development Economics, Elsevier, vol. 97(1), pages 99-111.
    19. Kim, Seonghoon & Quheng, Deng & Fleisher, Belton M. & Li, Shi, 2010. "The Lasting Impact of Mothers' Fetal Malnutrition on Their Offspring: Evidence from the China Great Leap Forward Famine," IZA Discussion Papers 5194, Institute of Labor Economics (IZA).
    20. Kim, Seonghoon & Deng, Quheng & Fleisher, Belton M. & Li, Shi, 2014. "The Lasting Impact of Parental Early Life Malnutrition on Their Offspring: Evidence from the China Great Leap Forward Famine," World Development, Elsevier, vol. 54(C), pages 232-242.

    More about this item

    Keywords

    China; Great Famine of 1959-1961; Information Distortion;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East

    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:pri:econom:2016-8. 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: Bobray Bordelon (email available below). General contact details of provider: https://edirc.repec.org/data/deprius.html .

    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.