Analyzing the outcomes of government-led poverty reduction policy – the case of 32 counties in southwestern china

Abstract

Despite the precipitous economic development in China since it adopted the open-door policy in 1978, the issue of regional economic disparity remains to be a notable macroeconomic and social challenge in the 21st century. The Chinese government has allocated large amounts of resources to promote economic development and to reduce economic disparity over the past few decades. This study attempts to better understand the effectiveness and efficiency of the Chinese government's poverty reduction policy in the Sichuan Tibetan region, a remote area with a severe economic disparity issue in China. Using the exploratory spatial data analysis (ESDA) method, the present study first categorized the 32 counties in the studied Sichuan Tibetan region into four clustering groups. Further, the data envelopment analysis (DEA) method was applied to examine relative efficiency performance at the county level over the 2000-2007 period. A unique feature of the present study is that it incorporates both the ESDA and DEA techniques to assess not only economic outcomes (i.e., GDP per capita) but also the degree of relative efficiency for each subset of the spatial area. Our findings suggest that the clustering outcomes from the ESDA method are consistent with the relative efficiency evaluations from the DEA approach overall. However, at an individual county level, we found that some counties in the low-level economic performance groups outperform the counties in high-level economic performance groups in terms of efficiency performance. These findings reveal that the economic performance variable, such as GDP per capita, does not comprehensively reflect an individual county's level of relative efficiency performance and each clustering group has a non-balanced efficiency performance pattern. Empirical findings and the methods employed in this study could be of help to government agencies and regional economics scholars when they evaluate the efficiency of a policy or a program across various geographic areas through effective benchmarking comparisons. We also recommend both traditional economic measures and scale efficiency outcomes should be considered when a local government's overall economic performance is evaluated. Besides, government officials should pay more attention to the decision-making units and attempt to find factors underlying the non-balanced efficiency performance pattern.