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Economic Legacies of the Cultural Revolution

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Original languageEnglish
Publication statusPublished - 14 Jan 2014

Abstract

This paper investigates the economic legacies of the Cultural Revolution in rural China. With its purported goals of tackling inequality and forestalling a “capitalist restoration,” the decade of 1966-1976 witnessed widespread violence, much of it directed towards the educated elite. Using a unique county-level dataset on collective killings, coupled with original economic data collected from archives of regional gazetteers, I investigate the extent to which this historic event yielded different trajectories of development across regions in China. To address endogeneity concerns, I control for pre-revolution outcomes and exploit transitory shocks to agricultural income during the period of violence as an instrument. Empirical results show that more revolutionary regions were slower to industrialize, had lower levels of education and per-capita output. These effects are large in magnitude, detectable more than thirty years later, and in some cases begin to decline at longer time horizons. Trust-based informal lending appears to have been adversely affected, while the timing of policy reforms does not.

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ID: 18009432