The role of collective mobilization in the divergent performance of the rural economies of China and India (1950-2005)

Abstract

This paper argues that the divergent performance of the rural economies of China and India after 1950 was a product of the different capabilities of the Chinese and Indian governments to mobilize the labor force and financial resources of the rural population. By mobilizing unpaid labor and the financial resources of the villagers through mediation by the collectives (before 1984) and local administrations (from 1984 to the abolition of agricultural taxation and compulsory rural labor mobilization in 2006), the Chinese state developed rural infrastructure and the quality of the labor force at a pace and geographical scope that was far beyond its limited fiscal capacity. Efforts by the Indian state to establish rural organizations with similar mobilization capabilities failed due to the effective opposition of well-entrenched political and economic interests in the countryside. Unable to mobilize the labor and financial resources of the villagers, the Indian government relied primarily on its limited fiscal resources, which produced a much slower development of physical infrastructure and labor force quality. These are the primary reasons why China's rural economy developed much more rapidly than India's, which contributed significantly to the divergence of their national economies in the post-1950 era.