The Economy of
Professor Louis Putterman Fall, 2004
Office: Room 206 Robinson Hall
tel: x33837; fax: x31970; e-mail: Louis_Putterman@ brown.edu
Office Hours: M and W,
This course examines the organization, structure, and performance of the economy of mainland
We are using a still-unpublished book by Barry Naughton, The Chinese Economy, which has undergone revisions as recently as this past summer, and which promises to become the standard text in this field when it is published. Copies of the book manuscript will be available for purchase at the Brown Bookstore. Other readings are suggested on the syllabus to round out your knowledge, but they are not required.
It is very important to note that the readings and lectures are complements to each other, not substitutes. At times, lectures will cover material not in the book, or may take a different approach from the book’s. Come exam time, you are expected to show your knowledge of both the reading and the ideas and facts brought up in class.
Exams and Grades: there will be two in-class mid-term exams and a three hour final examination as scheduled by the registrar. These will count for 25, 25, and 50% of the course grade, respectively. The format will be a combination of essays and short answer questions.
Tentative schedule: No class, Friday, Sept. 17; 1st exam, Wed., October 13; 2nd exam, Wed., Nov. 10; possible meeting or meetings during reading period: to be announced.
Final exam: as announced by registrar.
1. Introduction (Legacies and Setting)
2. Naughton, Chapter 2, The Traditional Economy through 1949
c. The case for planned socialism, in general, and in the developing world; background of Chinese socialism
d. Stalinist development strategy compared to laissez faire, import substitution industrialization (ISI), and export promotion; implications with respect to structural change (industrialization).
h. The reform process in long-term perspective: roles of agricultural, industry and trade; ‘growing out of the plan’; where
i. The urban-rural divide
2. Patterns of Growth and Development
a. Growth and Structural Change
c. Labor and Human Capital
d. Living Standards and Inequality
3. The rural economy
a. Rural organization (before 1949; land reform and collectivization; the early communes; the 3-tier commune system; de-collectivization)
(Optional suggested reading: Putterman, Continuity and Change in
Rural Development, 1993, Chapter 1; Dwight Perkins and Shahid
Yusuf, Rural Development in
b. Incentive theory: the household versus the collective
c. Output and productivity of Chinese agriculture
d. Rural industry
4. Industry and the Urban Economy
a. The organization of industry in
(Optional suggested reading: Gary Jefferson and Thomas Rawski, "Enterprise Reform in Chinese Industry" Journal of Economic Perspectives, Spring 1994.)
5. Trade and foreign investment
b. Foreign Investment
(Optional suggested reading: Nicholas Lardy, "The Role of Foreign Trade and Investment in china’s Economic Transformation," China Quarterly 144, pp. 1065-82 (Dec. 1995) reprinted in Andrew Walder, ed., China’s Transitional Economy, Oxford University Press, 1996.)
6. Macroeconomics and Finance
a. Trends and cycles
b. Government and enterprise finance