Routledge Handbook of the Chinese Economy by Chow Gregory C.; Perkins Dwight H.;

Author:Chow, Gregory C.; Perkins, Dwight H.;
Language: eng
Format: epub
ISBN: 1766914
Publisher: Taylor and Francis

4 The effect of property rights reform on performance

Changes in incentives due to the HRS reforms unleashed increases in both agricultural production and productivity. In one of the first studies on the subject, Lin (1992) uses regression analysis to estimate that China’s HRS accounted for 42 to 46 percent of the total rise in output during the early reform period (1978–84). Also using the results of regression analysis, Fan (1991) and Huang and Rozelle (1996) find that even after accounting for technological change, institutional change during the late 1970s and early 1980s contributed about 30 percent of output growth.

The effects of HRS go beyond increasing production. McMillan et al. (1989) use a TFP accounting approach to show that decollectivization increased total factor productivity (TFP). Better incentives accounted for nearly all of the increase in TFP (23 percent) between 1978 and 1984. Using regression analysis, Jin et al. (2002) also demonstrate that the HRS reforms contributed to 7 percent annual TFP growth in the early 1980s.

After the mid-1980s, however, the direct effects of decollectivization and the improved incentives diminished. De Brauw et al. (2004) demonstrates that the end of the one-time property rights reforms accounts for much of the slowdown of grain (although growth rates were still positive) and other crop production in the 1990s.

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