The Great Leap Forward: Anatomy of a Central Planning Disaster

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The Great Leap Forward: Anatomy of a Central Planning Disaster

Wei Li
University of Virginia, Cheung Kong Graduate School of Business, and Centre for Economic Policy Research

Dennis Tao Yang
Virginia Polytechnic Institute and State University

The Great Leap Forward disaster, characterized by a collapse in grain production and a widespread famine in China between 1959 and 1961, is found attributable to a systemic failure in central planning. Wishfully expecting a great leap in agricultural productivity from collectivization, the Chinese government accelerated its aggressive industrialization timetable. Grain output fell sharply as the government diverted agricultural resources to industry and imposed an excessive grain procurement burden on peasants, leaving them with insufficient calories to sustain labor productivity. Our analysis shows that 61 percent of the decline in output is attributable to the policies of resource diversion and excessive procurement. We are grateful to Mark An, who as a coauthor of earlier versions provided invaluable inputs for this research. We would also like to thank Rich Ashley, Dwayne Benjamin, Loren Brandt, Gregory Chow, Belton Fleisher, Roger Gordon, Ted Groves, Steven Haider, Allen Kelley, Steven Levitt (the editor), Barry Naughton, Yingyi Qian, Jim Rauch, Gerard Roland, Djavad Salehi, James Wen, Yaohui Zhao, Xiaodong Zhu, two anonymous referees, and seminar participants at Duke University, Michigan State University, North Carolina State University, Peking University, University of California at Berkeley, University of California at San Diego, University of Chicago, University of Toronto, University of Virginia, and Virginia Polytechnic Institute and State University for constructive suggestions and comments. We are also grateful to Xian Zude, Sheng Laiyun, Wang Pingping, and other researchers at the Rural Survey Organization of China’s State Statistical Bureau for data support. Wei Li gratefully acknowledges the financial support from the Darden School Foundation and the hospitality provided by Cheung Kong Graduate School of Business, where he was a visiting professor. [ Journal of Political Economy, 2005, vol. 113, no. 4] 2005 by The University of Chicago. All rights reserved. 0022-3808/2005/11304-0006$10.00

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great leap forward Ten thousand years are too long, seize the day, seize the hour! [Mao Zedong, “Manjianghong—a Reply to Comrade Guo Moruo,” 1963] I. Introduction

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In China, the world’s most populous country that was barely self-sufficient in food supply, the unthinkable happened: National grain output plunged by 15 percent in 1959 and by another 16 percent in the following two years. The government, which ran a closed economy, neither requested nor accepted international assistance. Famine soon raged across China. The turn of events in China in the late 1950s was dramatic. With much fanfare, the new Communist government launched the Great Leap Forward (GLF) movement in 1958. In its New Year’s editorial, the People’s Daily—the official newspaper of the Chinese Communist Party— proclaimed that the GLF would propel China to surpass Great Britain in industrial production in 15 years and the United States in 20 or 30 years. The nation was soon propelled to a state of exuberance, as news about extraordinary gains in agricultural and industrial production broke out across the country. It appeared that even the seemingly lofty GLF goal could be achieved much sooner. But as the first signs of famine emerged in the winter of 1959, grim reality gradually set in. Years later, demographers who extrapolated mortality trends in China estimated the total number of premature deaths during the GLF famine at between 16.5 and 30 million.1 Even by the most conservative estimate, this famine ranked the worst in the loss of human lives in recorded world history.2 Since the release of official data in the late 1970s, this catastrophe has attracted much attention from social...
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