The Study on Reform of Chinese Rural Institution in 21_<st> Century : by Analyzing Micro Data of Rural China

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Double-tier management system is promoted in rural China. This system is rural organization which has eclectic characteristics between people's commune and private family farm system. Is this system the most suitable for 21st century's Chinese agriculture? We firstly checked the rationality of this system based on the new institutional economics theory. The conclusion of our theoretical analysis of the system is as follows. First, this system is the system which utilize both of personal and common information. Second, this system is the system in which the collective chiefly absorbs risk and maintain the machines.We applied panel data analysis to management abilities of both individual and village under double-tier management system. We calculated profit function in which the constants can be testified as individual effect. If individual effect is verified, the constant can be judged as distinguished management ability. We estimate profit function of China's food production and judge t … More he individual effect by panel data analysis method. The utilized panel data is based on large fixed point observation data conducted by Chinese agricultural department. The results are following. First, it is proved that China's villages and most of farmers have the distinguished management abilities. The idiosyncratic management abilities of farmers and villages play important roles in China's agricultural development. Abilities of villages are made up by the transfer from profit of non-agricultural town and village enterprises to village's agricultural services for individual farmers. In many cases, however, these services are offered uniformly among farmers. This uniform offer predispose to make exhibition of farmers' management ability wipe away. It is proved in panel data analysis that the distinguished management abilities of farmers can not be recognized in rich villages. But after removal of the villages' time effects which exert same influence on farmers on each year, the primary management abilities can be recognized in most farmers. Farmers have their own idiosyncratic abilities in China. The institution which makes farmers display their abilities should be adopted in 21^<st> centaury, instead of simple double-tier management system. Less