Reforms, Investment, and Poverty in Rural China

• Published in: Economic development and cultural change 2004-01, Vol.52 (2), p.395-421
• Main Authors: Fan, Shenggen, Zhang, Linxiu, Zhang, Xiaobo
• Format: Article
• Language: English
• Subjects: Agrarian reform; Agricultural production; Agricultural productivity; Agricultural research; Agriculture; China; Correlation analysis; Crop economics; Crop production; Cultural change; Development studies; Econometrics; Economic development; Economic growth; Economic reform; Education; Egalitarianism; Expenditures; Government; Government spending; Income distribution; Inequality; Investment; Irrigation; Per capita; Poverty; Public infrastructure; Public investments; R&D; Reform; Research & development; Research & development expenditures; Research and development; Rural areas; Rural poverty; Studies; Urban agriculture; Urban areas
• ISSN: 0013-0079; 1539-2988
• DOI: 10.1086/380593

The literature on Chinese agricultural growth and rural poverty reduction is extensive. Few researchers, however, have attempted to link these topics to public investment. This study argues that, even with the economic reforms that began in the late 1970s, it would have been impossible to achieve rapid economic growth and poverty reduction in China had there not been several prior decades of government investment. Before the reforms began, the effects of government investment were inhibited by policy and institutional barriers. The reforms reduced these barriers, enabling investments to generate tremendous economic growth and poverty reduction. Similarly, public investment may have played a large role in reducing regional inequality, an issue of increasing concern to policy makers. The primary purpose of this study is to develop an analytical framework for examining the specific role of different type of government expenditure on growth and poverty reduction in rural China by controlling for other factors such as institutional and policy changes.