Development and the Rural-Urban Divide

John Harriss,Mick Moore

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351714891
• Edition: 1
• Topic: Scienze sociali
• Subtopic: Geografia umana

First published in 1984. It is widely acknowledged that rural-urban differences and interrelationships play an important role in the development process. Some theorists believe they are a primary cause of continuing poverty in poor nations. This volume of essays summarises and appraises theories of rural-urban relations and economic development and explores, mainly on the basis of country case studies, the conceptual and theoretical problems to which they give rise, and the extent to which they correspond to recent experiences in the Third World.

Urban Bias, Rural Bias or State Bias? Urban-Rural Relations in Post-Revolutionary China

by Peter Nolan* and Gordon White**

The authors aim to evaluate the relevance of ‘urban bias’ and ‘rural bias’ to the Chinese case. They present empirical evidence on the nature and extent of differentiation in rural-urban living standards, examine the political basis of relevant economic policies and investigate the relationship between these policies: both the changes in labour productivity in each sector and the inter-sectoral savings transfers. Both ‘urban’ and ‘rural bias’ hypotheses illuminate certain dimensions of Chinese development strategy. But the realities of rural-urban relations have been complex, and analysis must be supplemented by a focus on the divide between state and society, and the question of ‘state bias’.

Some writers argue that socialist strategies of development, including the Chinese, have been examples of strong ‘urban bias’. Others believe China has pursued a ‘rural-biased’ strategy. This article investigates the applicability of both these analytical categories, and suggests that the realities of rural-urban relations in post-revolutionary China are more complex than either of these simple characterisations allows.

Our analysis proceeds as follows. Since the central concern of poor people is their standard of living, we begin, in Section I, by examining the evidence on this, the most fundamental aspect of urban-rural differentiation. Section II investigates the ideological and political forces behind the economic policies which influence the outcomes presented in Section I. Section III examines these policies and their outcome in respect to labour productivity changes in each sector and inter-sectoral savings transfers.

URBAN-RURAL DIFFERENCES IN INCOME AND STANDARD OF LIVING

Statistical Problems

Over the past few years a flood of statistical material has been published in China. This enables a much better understanding of China's economic problems than before 1976. However, it must be remembered that historical data dealing with the years from 1957 to the late 1970s are based largely on guesswork, since the statistical apparatus was in disarray for much of this period. During the Great Leap Forward in the late 1950s massive falsification of data occurred, over and above that normally associated with administratively planned economies [Aird, 1982: 209-10]. In the Cultural Revolution the very idea of statistical expertise came under attack. According to Sun Yefang, ‘in those chaotic years, nearly all statistical organs at different levels throughout the country were disbanded, the staff were transferred and large quantities of materials were burned’ [Sun, 1981].

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* Jesus College, Cambridge. Peter Nolan wishes to thank the Social Science Research Council for financial support in the preparation of this paper, the grant being administered by the Department of Applied Economics, Cambridge.

** Institute of Development Studies, University of Sussex.

Defining ‘urban’ and ‘rural’ is a problem in all countries. In China, as elsewhere, the principal difficulty is with respect to people living in suburbs. China's cities have a large number of people who are under the administration of the city, but who work in agriculture; and in large numbers of suburban families, some work in agriculture and others have non-agricultural occupations. Obtaining accurate and consistent data is a massive problem. Although China has attempted to construct clear criteria to demarcate ‘urban’ from ‘rural’, the criteria have not been easy to implement, not merely because the statistical system was in disarray for most of the period from the late 1950s to late 1970s but also because of practical complexities of residence and occupation [Orleans, 1982]. China's current official series on ‘urban’ and ‘rural’ population appear to be trying to include only the non-agricultural ‘urban’ population [SSB, 1982: 507], but considerable guesswork is likely to have been involved. One of the leading Western demographers of China writes: ‘Chinese demographers – and I would say the Chinese government – do not have precise statistics on urban population and do not hesitate to use approximations’ [Orleans, 1982: 288].

A further complication, specific to China, is the fact that a lot of data relevant to this essay relate to ‘commune members’ on the one hand and ‘staff and workers’ on the other. Most ‘commune members’ live in the ‘rural’ areas, but many live in the suburban areas of municipalities. Most commune workers work in agriculture, but not all of them do. Most ‘staff and workers’ work in cities, but some work in villages. Rather than attempt to manipulate data with an often already shaky foundation, we have opted to use the data as they are, accepting that this involves categories that are not always precisely comparable.

Comparing average income and expenditure in urban and rural areas of poor economies is fraught with difficulties because the nature of economic activity is different in the two sectors [Nolan, 1979]. Urban workers in regular employment often have access to fringe benefits that may not be reflected in reported earnings figures, and peasants often have extremely varied sources of income about which it may be hard to get information (information on income from the ‘private plot’ in China is a notable example of this). Even if accurate figures on average household income could be obtained, data on family size are needed for these to be translated into comparable figures on average income per capita, and there is reason to think average family size is not the same in urban and rural areas. Translating reported figures on average income per capita into comparable figures reflecting the real value of income in each sector is a further problem. First, there may be differences between the price at which the peasants’ self-produced and self-consumed items are valued and the price paid in urban markets. In the 1950s in China farm gate prices seem to have been on average below those in urban retail outlets [Nolan, 1979], but since then the differential has been reversed. Secondly, city life may involve urban workers in extra expenditures which provide no extra utility – notably transport costs, but also a portion of outlays on rent, electricity and water charges, and even some material items such as alarm clocks and work-clothes. Moreover, to compare the real value of consumption in the two sectors, evidence is needed in respect to savings behaviour and inter-sectoral income transfers. Some attempts were made in China in the 1950s to allow for these things, and Chinese writers argued that the net effect was to considerably reduce the urban-rural gap (see, for example, the data for Hubei province in Table 1).

If it is difficult to make meaningful comparisons of the real value of income and consumption in town and countryside at a point in time, it becomes a Herculean task to assess changes over time. Estimates in value terms of changes in the urban-rural gap must be treated with great caution, and the available data on physical consumption of different items is probably more useful in analysing the urban-rural ‘gap’ (see below).

TABLE 1

CALCULATION OF DIFFERENTIAL IN REAL VALUE OF INCOME BETWEEN PEASANTS AND STAFF AND WORKERS, HUBEI PROVINCE, 1956

(Unit: Yuan per capita)

Intra-sectoral Differentials

Though the urban-rural dimension is useful for thinking about some development issues, in analysing income distribution and related problems, it should be remembered that China, no less than other economies, has important intrasectoral differentials. Within the rural production team (the lowest level of collective ownership, work organisation and income distribution prior to the recent reforms)¹ considerable inequalities existed in households’ average per capita income from the collective, mainly on account of variations in the worker-dependent ratio [Nolan, 1983b: 1437-8]. At a broader level, rural inequalities reflect spatial differences in average peasant income. The Chinese authorities have hardly interfered at all to extract ‘differential rent’ income from better located peasants and they have prevented intra-rural migration which might have helped to erode these differences. The most they have done (pre-1976) is to push richer areas into high marginal reinvestment rates and set upper limits to collective income distribution. Even then, substantial income differences existed, as the data for Guangdong province in Table 2 suggest. After 1976 upper limits to peasant income were removed and better located areas, mostly close to cities, experienced large increases in income so that the absolute gap between their average incomes and those of well located areas rose substantially [Nolan, 1983a].

TABLE 2

AVERAGE PER CAPITA DISTRIBUTED INCOME IN PRODUCTION TEAMS IN GUANGDONG PROVINCE, 1975

Within urban areas earnings vary for a number of reasons. In the state sector each occupation has different wage ranks [Korzec and Why te, 1981: 251], During the Cultural Revolution decade there was a tendency for wage earners to be clustered in the middle ranks of each occupational wage scale, but little information is available on the proportion of wage earners in different ranks. Since liberation, a considerable gap has existed between average wages in the urban state and collective sectors – in 1980, for example, average wages of staff and workers in state-owned units (containing 77 per cent of the total number of staff and workers) were 29 per cent above those in urban collective-owned units [SSB, 1982: 107 and 433]. Within both state and collective units average wages vary between different sectors. In 1980 in both state- and collective-owned units average annual wages were highest in ‘construction and exploration of resources’ (923 yuan and 714 yuan respectively) and lowest in ‘agriculture, forestry, water conservancy and meteorology’ (636 yuan and 489 yuan respectively) [SSB, 1982: 433]. In addition, the worker-dependant ratio varies between households. Unsurprisingly, recent survey data show quite a wide range in average per capita incomes of staff and worker families (Table 3).

TABLE 3

INCOME DISTRIBUTION AMONG STAFF AND WORKERS, 1981

Urban-rural Differences in Income and Consumption

Insufficient evidence is available to enable a clear account to be given of changes in the urban-rural gap in the real value of income and consumption from the 1950s to the 1980s. Some of the most relevant pieces of information are given in Table 4. The broad picture they suggest is this. F...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Editors’ Introduction
• Political Economy and the Rural-Urban Divide, 1767–1981
• Relative Agricultural Prices and the Urban Bias Model: A Comparative Analysis of Tanzania and Fiji
• Urban Bias, Rural Bias or State Bias? Urban-Rural Relations in Post-Revolutionary China
• ’Generative’ or ‘Parasitic’ Urbanism? Some Observations from the Recent History of a South Indian Market Town
• Categorising Space: Urban-Rural or Core-Periphery in Sri Lanka
• ‘Urban Bias’ and Rural Poverty: A Latin American Perspective
• Urban Bias Revisited