IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Dynamic Modelling of a Three-Sector Transitional Economy

Rural industry provides inputs and markets for agriculture, which in turn provides inputs and markets for rural industry. As the mutually supportive linkages between rural industry and agriculture develop, the size of both sectors increases. Under certain conditions rural industry grows more rapidly than agriculture, resulting in the structural transformation of the rural sector. But the growth of rural industry may hurt the state-owned industrial sector if both sectors compete for similar resources and product markets. To protect their state enterprises, transitional economies have at times suppressed the growth of non-state rural industries. This can hurt the economy overall. We show how the growth rates of agriculture and rural industry may decline, and, surprisingly, how the growth of state industry might fall if rural industry is suppressed. This is especially so if agriculture supports state industry. By suppressing rural industry, agriculture is hurt. The decline in agriculture then hurts state industry, undermining the objective of protecting state industry. Depending on the magnitude of the relevant impacts, intervention to protect state industry may or may not be optimal, leaving governments with difficult policy decisions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 01/01.

in new window

Length: 28 pages
Date of creation: 30 Oct 2001
Date of revision:
Handle: RePEc:wai:econwp:01/01
Contact details of provider: Postal: Private Bag 3105, Hamilton, New Zealand, 3240
Phone: + 64 (0)7 838 4758 (Administrator)
Fax: + 64 7 838 4331
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Rawski, Thomas G, 1994. "Chinese Industrial Reform: Accomplishments, Prospects, and Implications," American Economic Review, American Economic Association, vol. 84(2), pages 271-75, May.
  2. Putterman, Louis, 1992. "Dualism and Reform in China," Economic Development and Cultural Change, University of Chicago Press, vol. 40(3), pages 467-93, April.
  3. Ranis, Gustav & Stewart, Frances, 1993. "Rural nonagricultural activities in development : Theory and application," Journal of Development Economics, Elsevier, vol. 40(1), pages 75-101, February.
  4. Vogel, Stephen J, 1994. "Structural Changes in Agriculture: Production Linkages and Agricultural Demand-Led Industrialization," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 136-56, January.
  5. Chen, Kang & Jefferson, Gary H. & Singh, Inderjit, 1992. "Lessons from China's economic reform," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 201-225, June.
  6. Rozelle Scott, 1994. "Rural Industrialization and Increasing Inequality: Emerging Patterns in China's Reforming Economy," Journal of Comparative Economics, Elsevier, vol. 19(3), pages 362-391, December.
  7. Naughton Barry, 1994. "What Is Distinctive about China's Economic Transition? State Enterprise Reform and Overall System Transformation," Journal of Comparative Economics, Elsevier, vol. 18(3), pages 470-490, June.
  8. Woo, W.T., 1993. "The Art of Reforming Centrally-Planned Economies: Comparing China, Poland and Russia," Papers 93-09, California Davis - Institute of Governmental Affairs.
  9. Islam, Rizwanul & Hehui, Jin, 1994. "Rural industrialization: An engine of prosperity in postreform rural China," World Development, Elsevier, vol. 22(11), pages 1643-1662, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wai:econwp:01/01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brian Silverstone)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.