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2024 | OriginalPaper | Chapter

4. Privileges Sustained by Central Planning: An Analytical Method of Property Rights

Author : Jun Zhang

Published in: Reform, Transformation and Growth

Publisher: Springer Nature Singapore

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Abstract

One of the fundamental features of the centrally planned economy (CPEs) is that its operation is fully based on initial definition of distribution of privileges maintained by executive order, which is the basic system arrangement of central economic planning: urban and rural separation, the household registration system, farmers cannot change their identity, favorable planned price, unemployed professions, welfare subsidized by government, regions and industries that are given priority for development and resource allocation dictated by administrative orders, etc., are the various forms of privileges stemmed from the central planning. We call this type of privilege “planning privilege”.

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previous chapter Monetary Incentive and Property Rights Structure of Socialist Enterprises: China’s Experience

next chapter The Growth of China's Industrial Output Since the Reform: Double-Track Pricing and Border Competition

In the research literature about the economics of central planning, the system’s features are often stressed. In fact, as a fact of experience, these features are probably known to all. However, there are not many research literatures directly about these privileges. As far as I know, Jan Winiecki is probably a more prominent scholar who analyzed the impact of these privileges in her many literatures discussing reform on the economic system of the Soviet Union. For example, we may refer to her latest book, Obstacles to Economic Restructuring in the Soviet Union: A Property Rights Approach. In China, literatures on this problem mainly include Cheng Hong’s Seeking A Stable Approach to Reform and Conditions, Limitations and Forms of Marketization, Jun Zhang's Theory of Property Rights and Institutional Change under Centrally Planned Economy.

Sheng (1991, 1992).

Zhang (1993).

Cot: Coase Theorem, see: New Palgrave Dictionary of Economics (English Edition), vol. 1, MacMillan Publishing Company, 1987.

Economist J. Stephen expressed this view in Legal Economics which was published in 1988 by Wheatsheaf Press. The book is a useful reference to know economics of property rights and an introduction to economics of law.

For modern property right economics, see Zhang (1991).

R. Coase’s study mainly focuses on these externalities or social costs. See Coase (1960).

This externality caused by the prohibition of negotiations was discussed by Demsetz. See (US) Demsetz (1967).

Demsetz’s expression of Coase theorem from the point of view of “buy-in” and “buy- out” is very brilliant to me. For details, see (US) Demsetz (1967).

(US) Demsetz (1991).

(US) Barzel (1989). This book is a successful study on the historical and institutional changes (especially slavery) by using property rights economics and has some impact on Western academia.

Barzel (1989), p. 83.

For the wealth distribution effect in this contex, see Zhang (1993).

This externality caused by the prohibition of negotiations was discussed by Demsetz. See (US) Demsetz (1967).

(US) Demsetz (1991).

Zhang (1993).

Cheng (1992).

About formation and analysis of local market, see Pan and Luo (1988).

An empirical study proved the role of this marginal adjustment. See Comprehensive Investigation Team of Chinese Institute of Economic Restructuring: Reform: Challenges and Choices We Face, pp. 45–57, Beijing, China Economic Press, 1986.

Yang et al. (1992).

Cheng (1993).

Coase: Social Costs Issue, in Journal of Law and Economics, 1960 (10), pp. 1–44.

Cheng Hong: Conditions, Limitation and Forms of Marketization, in Economic Studies, 1992 (11).

Cheng Hong: Correlation of Income Distribution, Transaction Costs and Others, in Economy Studies, 1993 (11).

Pan Zhenmin, Luo Shouchu: Equilibrium Theory of Socialist Micro-Economy, pp. 88–107, Shanghai, Shanghai SDX Joint Publishing Company, 1988.

Sheng Hong: Conditions, Limitations and Forms of Marketization, in Economic Stuides, 1992 (11).

Sheng Hong; Seeking A Stable Way for Reform, in Economic Studies, 1991 (1).

(US) Demsetz: Toward A Theory of Property Rights, in The American Economic Review, 1967 (5), pp. 347–359.

(US) Demsetz: A Framework for the Study of Ownership, in Property Rights and Institutional Changes, pp. 179–200, Shanghai, SDS Joint Publishing Company, 1991.

(US) Barzel: An Economic Analysis of Property Rights (English Edition), Cambridge, University of Cambridge Press, 1989.

Yang Xiaokai, Wang Jianguo, Hui Ersi: Economic Growth, Commercialization and Institutional Changes of Chinese Agriculture, in Chinese Economic Review, 1992 (1), pp. 1–37.

Zhang Jun: Theory of Property Rights and Institutional Change under Centrally Planned Economy, in Economic Studies, 1993 (5).

Zhang Jun: Modern Property Right Economics, Shanghai, SDX Joint Publishing Company, 1991.

Title: Privileges Sustained by Central Planning: An Analytical Method of Property Rights
Author: Jun Zhang
Publisher: Springer Nature Singapore
Book: Reform, Transformation and Growth
Print ISBN: 978-981-9957-11-8

Electronic ISBN: 978-981-9957-12-5

Copyright Year: 2024
DOI: https://doi.org/10.1007/978-981-99-5712-5_4