Revisiting Institutions, Technology, and China's Agricultural Development

Author: Lin Yifu
Publisher:
Publish Date: 2003-09-01
Features: This book is a seminal 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 significant 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 farmers' ability to operate independently, thereby incentivizing entrepreneurship. During the collectivization process in the 1950s, when primary cooperatives were established, farmers had the freedom to withdraw, but by the time of the People's Communes, farmers lost this option and were deprived 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 lack of exit rights could also incentivize laborers to work hard, fostering a sense of "unity in adversity."