The Great Leap Forward: Anatomy of a Central Planning Disaster
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
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
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