ABSTRACT
This study focuses on the agricultural ‘responsibility’ system. I start with a succinct review of the reform measures, emphasizing their inter-relatedness in an integrated operating perspective. I then utilize traditional economic tools to illustrate the evolution of institutions, and the cultural values that regulate them. I examine the effects of China’s agricultural reform from the welfare perspective of a representative urban worker. Though the reform measures are aimed at increasing food production, the economic incentive has led to (or is allowed to) the development of a market oriented agricultural production. Combined with the changes in rationing and retail practices, this manifested itself in the partial restoration of consumer choice, which is the essence of a market economy. I also analyze the farmers’ benefits, stemming from both the change in procurement price (and practices) and the dual-track free market, and conjecture on the future of China’s reform.
