This dissertation is a study of the consequences of decollectivization (1978-1984) in rural China, a fundamental institutitional change that replaced Maoist collective economy with the Household Responsibility System, for the conditions of Chinese rural poverty. It first examines how decollectivization reshaped the spheres of prodution, exchange and distribution in Chinese rural economy, and discovers that it produced some adverse impacts on poverty reduction in rural China. The author then conducts a critical evaluation of official rural poverty statistics and reestimates the post-1978 Chinese rural poverty reduction performance. The results show that Chinese rural poverty might not have been reduced by much, or even worse, might well have increased since decollectivization. The research findings presented in this dissertation challenge the conventional wisdom that decollectization made a great contribution to poverty reduction in rural China. This dissertation study has an implication for poverty studies: institutional changes that seem to work well in generating economic growth may not work for promoting poverty reduction.

The 20th Century saw dramatic agrarian changes among third world countries. In many countries, the agrarian relations tended to be peasant-oriented at first, and then started favoring capital and landlord in the recent decades. In this dissertation, I explored the historical conditions and consequences of these profound changes, in particular focusing on the history of rural collectives and decollectivization in China. My findings differ from the existing literature in the following aspects. First, the literature argues that the Chinese rural collectives suffered from inefficiency and the decollectivization reform greatly improved agricultural productivity. My research shows that the previous studies suffer from a number of serious logical and/or methodological problems. After adjusting some data misusage, my results suggest that decollectivization did not increase productivity. I also construct an index of the legacy from the commune era to evaluate the long run impacts from the socialist period on agricultural productivity. The empirical results suggest that the provinces with higher socialist legacy tend to have higher agricultural productivity growth rates even after decollectivization. Second, the mainstream history suggests that due to their dissatisfaction with the rural regime, the peasants spontaneously organized and collectively dismantled the collective system. My research shows that the government was enthusiastic rather than passive in promoting the household model. The cadres who did not follow the orders from the central leadership would face immense political pressure. The mainstream view holds that those people who opposed decollectivization were local cadres who were afraid of losing control. But my research suggests that the cadres and a small part of peasants implemented and benefitted from the reform while the normal peasants were not enthusiastic and even opposed decollectivization in some cases. Moreover, my fieldwork suggests that many rural collectives experienced work avoidance and inefficiency, not because of egalitarianism but stratification (which basically means a cadre-peasant/manger-worker divide). The demise of rural collectives was mostly due to political pressure from the government. But the stratification contributed to peasants' passiveness in resisting the institutional change.

This dissertation explores how economic institutions governing finance and investment have contributed to growth in reform-era China. Economic and political reforms transformed Chinas prior centrally-planned economy. Although reforms incorporated elements of market institutions and private enterprise, state institutions exercising extensive authority over a wide range of economic affairs critically and fundamentally played a central role in transforming this economy from one of the worlds poorest to the worlds second largest in the span of one generation. I explain the emergence of a unique configuration of institutions supportive of industrial policy implemented by largely autonomous local government officials. In combination with state-directed bank credit, this local government industrial policy finance has played a significant and positive role in development of exports in China. Though private entrepreneurs are often seen as dynamic engines of growth in Chinas reform-era economy, I show the vast majority of entrepreneurs are low-skilled, low-productivity, and exhibit non-positive rates of capital accumulation. Most entrepreneurs would experience higher earnings were they not segmented into self-employment occupations by adverse socioeconomic conditions. Rather than engines of growth, Chinas entrepreneurs resemble more the vast numbers of informal sector self-employment prevalent in many developing countries.