Great Leap Forward or Backward? Anatomy of a Central Planning Disaster

40 Pages Posted: 6 Sep 2001

See all articles by Mark Yuying An

Mark Yuying An

Federal National Mortgage Association (Fannie Mae); Duke University

Wei Li

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Dennis Tao Yang

Chinese University of Hong Kong - Department of Economics

Date Written: March 2001

Abstract

The Great Leap Forward (GLF) disaster, characterized by a collapse of grain output, and the associated famine in China between 1959 and 1961, can be attributed to a systemic failure in central planning. Encouraged by unrealistic expectations for agricultural productivity gains from collectivization, the government switched to an accelerated and infeasible timetable for industrialization. Consequently, it diverted massive amounts of agricultural resources to industry and imposed excessive grain procurement burdens on peasants, leaving them with insufficient food to sustain labor productivity. Grain output fell sharply at the onset of these policies and started to recover gradually when the policies were reversed. Official data and our supplementary survery data support the theoretical prediction regarding the dynamic progression of the disaster. They also show that over 80 percent of the decline in grain output is attributable to the policies of excessive procurement and resource diversion.

Keywords: Industrialization, Central Planning, Agricultural Crisis, Grain Procurement, Work Capacity, Resource Diversion, China

JEL Classification: O14, P32, N55, Q18

Suggested Citation

An, Mark Yuying and Li, Wei and Yang, Dennis Tao, Great Leap Forward or Backward? Anatomy of a Central Planning Disaster (March 2001). Darden Business School Working Paper No. 01-19. Available at SSRN: https://ssrn.com/abstract=282526 or http://dx.doi.org/10.2139/ssrn.282526

Mark Yuying An (Contact Author)

Federal National Mortgage Association (Fannie Mae) ( email )

3900 Wisconsin Avenue, NW
Mail Stop 1H3N-01
Washington, DC 20016-2892
United States
(202) 752-8442 (Phone)
(202) 752-5460 (Fax)

Duke University ( email )

Box 90097
207 Social Sciences
Durham, NC 27708-0097
United States
(919) 660-1809 (Phone)
(919) 684-8974 (Fax)

Wei Li

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-243-7691 (Phone)
804-243-7681 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/li.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Dennis Tao Yang

Chinese University of Hong Kong - Department of Economics ( email )

Shatin N.T.
Hong Kong
Hong Kong

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