Collective agriculture during the People’s Commune era was characterized by excessive egalitarianism in terms of income (both cash and in-kind) distribution. However, certain regions in China were forced to “industrialize” because of the worsening population-to-land ratio and found a way to do so without undermining the collective framework. This was coupled with attempts to contain possible widening income disparities arising from unequal access to rare job and income opportunities. This research tries to investigate what underpinned the criteria governing access to these opportunities, and their impact on income distribution. Using a unique dataset including 316 households in a village in Wuxi City in the 1970s, I found the emergence of non-agricultural economy did not change the equi...[ Read more ]

Collective agriculture during the People’s Commune era was characterized by excessive egalitarianism in terms of income (both cash and in-kind) distribution. However, certain regions in China were forced to “industrialize” because of the worsening population-to-land ratio and found a way to do so without undermining the collective framework. This was coupled with attempts to contain possible widening income disparities arising from unequal access to rare job and income opportunities. This research tries to investigate what underpinned the criteria governing access to these opportunities, and their impact on income distribution. Using a unique dataset including 316 households in a village in Wuxi City in the 1970s, I found the emergence of non-agricultural economy did not change the equity oriented rationality of the Commune system thoroughly, but it did put more emphasis on efficiency oriented rationality, and thus gave higher returns to human capital, rather than class background. The “dual rationality” (equity-cum-efficiency) institution adopted in Commune with a burgeoning non-agricultural sector was a unique feature of those forced to industrialize by population density and a heavy grain procurement policy.