7/25/2019 The Institutional Causes of Famine in Chine 1959 61 Sourav Sinha

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The Institutional Causes of Famine in China, 1959-61

Article Summary

Sourav Sinha

This paper studies the role of institutions in the Great Famine of China that lasted for three yearsstarting in the winter of 1959-60 and wiped out between seventeen and thirty million people. As inexisting literature on the causes of the Great Famine in China, this paper points to central planning asthe primary cause of the famine. However while others analyze the drop in production in the fall seasonof 1959, this paper posits a mechanism that translated this drop into a disaster. The authors present twomain empirical findings: (1) at the onset of the famine in 1959, food production was almost three timesthe subsistence needs, and (2) in the famine years there is a negative correlation between food productionand mortality rates across regions. Even by conservative standards the drop in food production in 1959from preceding years can alone little explain the severity of the famine. The centrally planned grainprocurement policy, which based procurement on past years production resulted in perverse outcomesin the famine years, when high productive regions were taxed more than low ones, even though thedrops in production across regions were comparable. The inability of a centrally planned system totimely report this drop and recalibrate procurement quotas were complemented by transport costs ofredistribution to famine-hit areas and misreporting of production for fear of reprisal in a tense politicalclimate, to effectively translate the innocuous drop to a disaster. The authors use empirical analysis usingboth conservative accounts of Chinese data and retrospective data on proxies to show that the productionin the famine year 1959 had significantly negative effects on mortality rates, even after controlling forother confounders. They then theorize a model of a centrally planned economy with imperfect flexibilityto new information where they show that even under utilitarian objectives a procurement policy like inthen China would result in higher productive regions experiencing a higher procurement tax, a negativecorrelation between food production and mortality in a food production boom and a positive one induring a downturn. Factors like misreporting, favouritism and transport costs would only strengthen

the predictions of the model. This study opens up interesting avenues for future work, especially on theconstraints of central planning and the institutional details of other famines in non-market economies.

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