Wu Jinglian, Ma Guochuan, Xiaofeng Hua, and Nancy Hearst
- Published in print:
- 2016
- Published Online:
- May 2016
- ISBN:
- 9780190223151
- eISBN:
- 9780190223182
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190223151.003.0004
- Subject:
- Economics and Finance, Development, Growth, and Environmental, International
With China’s changed political situation in 1957–58, it became politically incorrect to share interests with state-owned enterprises and workers. The 1958 reform consisted of decentralizing power to ...
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With China’s changed political situation in 1957–58, it became politically incorrect to share interests with state-owned enterprises and workers. The 1958 reform consisted of decentralizing power to local governments. But the decentralized planned economy was similar to the centrally planned economy in that they both used administrative commands to allocate resources. Therefore, it is more accurate to refer to China’s post-1958 economy as a “decentralized command economy.” This was the institutional foundation for the 1958 Great Leap Forward. By the end of the year, the negative results of the Leap, which completely lacked common sense, had become increasingly apparent. Between 1958 and 1976, the decentralized command-economy measures resulted in a vicious cycle: once powers were decentralized, chaos ensued, leading to yet another round of centralization, and as soon as powers were again recentralized, the economy lost its vitality.Less
With China’s changed political situation in 1957–58, it became politically incorrect to share interests with state-owned enterprises and workers. The 1958 reform consisted of decentralizing power to local governments. But the decentralized planned economy was similar to the centrally planned economy in that they both used administrative commands to allocate resources. Therefore, it is more accurate to refer to China’s post-1958 economy as a “decentralized command economy.” This was the institutional foundation for the 1958 Great Leap Forward. By the end of the year, the negative results of the Leap, which completely lacked common sense, had become increasingly apparent. Between 1958 and 1976, the decentralized command-economy measures resulted in a vicious cycle: once powers were decentralized, chaos ensued, leading to yet another round of centralization, and as soon as powers were again recentralized, the economy lost its vitality.
