Teaching Comparative Government and Politics

Monday, November 09, 2015

Poverty in Communism

Marx said it was all to end in equality. Of course Marx long ago was replaced by Mao in China. He in turn was replaced by Deng, who was replaced…

Rural poverty: Ham-fisted handouts

On October 16th President Xi Jinping said China would eradicate poverty by 2020. That would mean that 70m people must rise above the official poverty line, which is 2,300 yuan a year (the equivalent of about $2 a day at purchasing-power parity, slightly higher than the World Bank’s global standard). This is supposed to be a priority in the next five-year plan…

Between 1980 and 2010 China cut the number living below the poverty line by around 600m, by far the biggest reduction in a single country ever. It did this indirectly—by building everything from roads and factories to schools and hospitals, thus boosting employment and incomes… Those still living below the line are almost entirely rural people who cannot work for reasons such as age, disability or because their villages are remote and inhospitable. Helping them will require more direct measures, not least giving cash.

The government mainly does this through its “subsistence guarantee” programme, often known by its Chinese shorthand, dibao. In principle, those whose income is below the minimum needed to keep them in adequate comfort…

Most of China’s poorest, however, are not in the programme…

The dibao system was set up by the central government but is implemented by local authorities…

Widespread discretion breeds widespread corruption… In 2012 He Guoqiang, then one of China’s highest-ranking leaders, said of village bosses: “They don’t do their jobs…they don’t really understand which households are in difficulty… and they give dibao benefits to relatives, friends or even themselves.”

Recently, matters have begun to improve. The government has set up a system of cross-checking applications… to limit fraud…. Local authorities used to bear most of the cost of the dibao system. Now the central government pays two-thirds. This should give it more clout in its attempts to improve the programme.

But more needs to be done. “We need to improve the quality of our data and really solve the issue of who we are supporting,” says Liu Yongfu, a senior anti-poverty official in Beijing. The target of eliminating rural poverty by 2020 is unlikely to be met without further reform of dibao.

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