Labour Markets, Poverty, and Development

By Giorgio Barba Navaretti; Riccardo Faini et al. | Go to book overview
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Labour Allocation under Baochan

Minquan Liu


In a recent contribution to the literature on collective farming, Liu ( 1994a) argues that, under the classical collective farm system of the Chinese commune type, collective members actively participated in collective production even more than a self-cultivating private farmer would spend time working, but while engaged in this collective work they shirked. In this paper I extend that analysis and show that a reformed collective farm system (RS) could overcome the shirking problem. Liu ( 1994a) also stresses that the Chinese commune system was able to mobilize vast amounts of additional labour from members for various kinds of agricultural infrastructural investment, and discusses the reasons.1 I show that under RS this potential could be maintained. Against the widely reported deterioration of agricultural infrastructure in China since the end of the commune system (and the equally widely recognized need for agricultural infrastructural investment in other developing nations), the policy implications of my analysis are strong. However, the aim of this paper is to provide a theoretical investigation only. In future work, the policy implications and ways of implementing a RS, and the problems thereof, may be addressed.

It should be pointed out that the reformed system I examine is by no means hypothetical. In the history of collective farming in China, a system called 'Baochan' was twice practised in parts of China. Since I closely model my new system after it, I call it Baochan.2

I am extremely grateful for the comments by Professor A. K. Sen, from which this revision has greatly benefited. I would also like to thank Sudhir Anand, Chris Bramall, Chaodong Huang Louis Putterman, and Shujie Yao for comments and discussions. All errors are my responsibility. Further comments are most welcome.
The practice was known in China as 'labour accumulation'. While it was widely noted in the development studies literature a decade ago, it has since been seriously neglected. For example, a recent major work on a commune in North China ( Putterman 1993) makes no mention of the practice. For important early studies, see Nickum ( 1978); Rawski ( 1979); Ullerich ( 1979); Perkins ( 1980); and Perkins and Yusuf ( 1984).
While the Baochan system (Baochan daohu) has not received attention in the theoretical literature, many sources have documented its practice. Its first appearance was during the collectivization period in the mid-1950s and in the immediate aftermath of the Great Leap. It was again adopted in parts of China in the late 1970s and early 1980s just before the demise of the commune. See the Chinese bimonthly Zhongguo Nongye Hezuoshi Ziliao (various issues), Potter and Potter ( 1990), and Bramall ( 1995).


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Labour Markets, Poverty, and Development


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