ABSTRACT
This chapter analyzes the Mao Zedong development system. It explains the analytical framework for economic development, and then examines the logic of Mao Zedong's Development System, and the actual development strategy and policy. The chapter investigates the characteristics of the Chinese economy in the centrally planned system from the viewpoint of Zheng She He Yi, and the closeness of the management system. It indicates the problems of lower efficiency, which were associated with Mao Zedong's development system, focusing our attention upon institutional inefficiency. Myint , Lal , and Ishikawa also explained the difference in economic performance among the third world countries in the 1970s and 1980s through three factors: initial condition, institutions, and economic policy. When taking notice of development performance, three factors seem to be closely related with the performance. The Zheng She He Yi was to be one of the most important characteristics of centrally planned economies.
