Revisiting Institutions, Technology, and Agricultural Development in China

Author: Lin Yifu
Publisher:
Publish Date: 2003-09-01
Features: This book is a significant work in new institutional economics that studies institutions and technology as endogenous variables of the economic system. "Revisiting Institutions, Technology, and China's Agricultural Development" is Professor Lin Yifu's second monograph, following his 1992 publication "Institutions, Technology, and China's Agricultural Development" (which won the Sun Yefang Economic Science Award in 1992), in which he employs rigorous economic methods to examine institutional and technological issues in China's rural areas, agriculture, and economic development. The achievements of China's reform and opening-up, particularly in rural reform, have been widely recognized globally. The practices of Chinese farmers have led to profound transformations in rural economic systems and rapid economic growth, demonstrating that laborers not only adapt to systems but also drive systemic change. The author argues that the key to the success of rural reform lies in enabling farmers to operate independently, thereby incentivizing entrepreneurship. During the collectivization process in the 1950s, farmers had the freedom to withdraw from primary cooperatives but lost this option when the system evolved into people's communes, depriving them of the right to farm independently. The difficulties in supervising collective labor led to "free-riding" and shirking, resulting in catastrophic consequences. The commentaries, however, suggest that the absence of exit rights could also incentivize laborers to work diligently, fostering a sense of "unity in adversity."