China's agricultural reforms: The importance of private plots

Abstract

Largely unexplored by post-reform economic research, pre-reform sociological and anthropological evidence indicates a strong preference among Chinese households to work in and allocate a disproportionate share of non-land inputs to individual private plots. Using various estimated Chinese and multinational agricultural production functions, this article seeks to quantify how much of the increase in China's agricultural output between 1980 and 1984 can be explained by eliminating these inefficient input allocations. Results indicate that as much as 53 percent of increased farm output may be explained by changes in input allocations. Moreover, because they involve only a reallocation of existing inputs, these results are separate from the changes in labor incentives and effort, which also characterized the agricultural reforms. Multinational agricultural production functions, however, suggest that similar results may not be realized in other formerly socialist countries.