On explaining China's rural sectors' productivity growth

While explaining China's rural sectors' productivity growth in the post-reform period, several studies have identified technological progress and improvement in technical efficiecy as the two major sources of productivity growth. Though isntitutional reform measures have been vital to productivity growth, the question addressed in this papar is as to which factor has provided the link between productivity growth and reform. With a two-sector models, this paper identifies that removing institutional restrictions on intersectoral labour mobility has been instrumental in accelerating economic growth at the overall rural econmomy level. Empirical results also show that an anti-market policy change had produced a negative effect on productivitity growth between 1989 and 1991 at the rural economy level.