The Institutional Causes of Famine in China, 1959-61

Article Summary
Sourav Sinha
This paper studies the role of institutions in the Great Famine of China that lasted for three years
starting in the winter of 1959-60 and wiped out between seventeen and thirty million people. As in
existing literature on the causes of the Great Famine in China, this paper points to central planning as
the primary cause of the famine. However while others analyze the drop in production in the fall season
of 1959, this paper posits a mechanism that translated this drop into a disaster. The authors present two
main empirical findings: (1) at the onset of the famine in 1959, food production was almost three times
the subsistence needs, and (2) in the famine years there is a negative correlation between food production
and mortality rates across regions. Even by conservative standards the drop in food production in 1959
from preceding years can alone little explain the severity of the famine. The centrally planned grain
procurement policy, which based procurement on past years production resulted in perverse outcomes
in the famine years, when high productive regions were taxed more than low ones, even though the
drops in production across regions were comparable. The inability of a centrally planned system to
timely report this drop and recalibrate procurement quotas were complemented by transport costs of
redistribution to famine-hit areas and misreporting of production for fear of reprisal in a tense political
climate, to effectively translate the innocuous drop to a disaster. The authors use empirical analysis using
both conservative accounts of Chinese data and retrospective data on proxies to show that the production
in the famine year 1959 had significantly negative effects on mortality rates, even after controlling for
other confounders. They then theorize a model of a centrally planned economy with imperfect flexibility
to new information where they show that even under utilitarian objectives a procurement policy like in
then China would result in higher productive regions experiencing a higher procurement tax, a negative
correlation between food production and mortality in a food production boom and a positive one in
during a downturn. Factors like misreporting, favouritism and transport costs would only strengthen
the predictions of the model. This study opens up interesting avenues for future work, especially on the
constraints of central planning and the institutional details of other famines in non-market economies.