Did Higher Inequality Impede Growth in Rural China?

Benjamin, Dwayne ; Brandt, Loren ; Giles, John

关键词: ACCOUNTABILITY;    ADVERSE EFFECTS;    ADVERSE IMPACT;    AGRICULTURAL SECTOR;    ANNUAL GROWTH;   

DOI  :  10.1596/1813-9450-5483
RP-ID  :  WPS5483

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper estimates the relationshipbetween initial village inequality and subsequent householdincome growth for a large sample of households in ruralChina. Using a rich longitudinal survey spanning the years1987-2002, and controlling for an array of household andvillage characteristics, the paper finds that householdslocated in higher inequality villages experiencedsignificantly lower income growth through the 1990s.However, local inequality s predictive power and effects aresignificantly diminished by the end of the sample. The paperexploits several advantages of the household-level data toexplore hypotheses that shed light on the channels by whichinequality affects growth. Biases due to aggregation andheterogeneity of returns to own-resources, previouslysuggested as candidate explanations for the relationship,are both ruled out. Instead, the evidence points tounobserved village institutions at the time of economicreforms that were associated with household access to higherincome activities as the source of the link betweeninequality and growth. The empirical analysis addresses anumber of pertinent econometric issues including measurementerror and attrition, but underscores others that are likelyto be intractable for all investigations of theinequality-growth relationship.