Responsiveness, Flexibility, and Market Liberalization in China's Agriculture

Abstract

been at most only limited gains from market liberalization. If one were to take the findings of this admittedly scant literature seriously, it would appear as if there is at most only a relatively small impact from market reforms in China. We believe there are three possible, but only one plausible, explanations for the findings. First, if market liberalization actually contributes little to no growth or increases in output or incomes, this would, of course, in part explain why economies that lead reform with market liberalization do not experience significant gains. Theory and the experiences of other economies in other settings, however, would argue against such an interpretation. Second, it could be that China's agricultural market liberalization has just proceeded so slowly that it is still too early for output to have been positively affected by market liberalization. However, as seen above, the record on the market expansion and the observations of many researchers would not support this view.