Reforming state-market relations in rural China 1

Because of the political importance of stable and affordable food prices, governments in transitional economies in Europe and Asia fkequently struggle to balance the desire to maintain state controls in the rural sector with the goal of promoting market development and privatizing or commercializing state agencies involved in rural trade or finance. This paper examines institutional change in China's rural state agencies during the reform period, focusing on the conflict between managerial incentives to maximize profits, on the one hand, and implement policy, on the other. We explain the reasons for changing contractual incentives and authority arrangements over time, assess the effects of new institutional forms on economic performance and policy implementation, and consider reform options.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/71599/1/j.1468-0351.1998.tb00059.x.pd

Surplus labour and productivity in Chinese agriculture: Evidence from household survey data

This study investigates whether the concept of surplus labour adequately characterises the labour conditions facing rural Chinese households, and the implications of such a surplus for household labour allocation. Using household survey data from one county in north China, we first estimate the marginal products of labour in agricultural and non-agricultural activities; these are compared with the returns to labour in other activities. The marginal returns to agricultural labour are found to be a fraction of those to non-agricultural labour, consistent with the existence of surplus labour and constraints on labour mobility. Investigation of the variation in marginal returns across activities and households illustrates the importance of village characteristics and household endowments, including demographic composition and political connections, in determining a household's capacity to transfer labour out of agriculture.