The relationship between rural and urban sectors: case studies of China and India

In this paper, the authors examine the history of the relationship between the rural and urban sectors in China and India, including the development of policies that influenced this relationship and their impact on poverty in China and India. Although the policy bias toward urban areas has diminished somewhat in both China and India, the authors argue that continued action to redress urban bias is crucial to strengthening and exploiting the synergies between the rural and urban sectors in both countries.


The paper first presents a conceptual framework to define and measure the extent of urban bias and reviews policies that have contributed to such bias and their changes over time in China and India. It then presents an analysis that uses a panel data set to evaluate the contribution of rural growth to the reduction of both rural and urban poverty, and the impact of urban growth on rural and urban poverty reduction. The paper also makes suggestions for how to promote better rural-urban linkages for poverty reduction, including:

1.)increase public spending in rural areas

2.)reduce restrictions on rural-urban migration

3.)develop the rural nonfarm sector

3.)develop small rural towns.

The paper concludes that correcting a government’s bias towards investment in urban areas is one of the most important policies to pursue. In particular, more investment in education, infrastructure, and agricultural research and development have proved to be both pro-growth and pro-poor. Facilitating the mobility of productive factors, such as labour, is another means to correct any bias. In particular, providing health, education, housing, and pension services for rural migrants in urban areas is essential to promoting human capital movement from rural to urban areas or to the industrial sector. Promoting the development of the rural nonfarm economy and rural small towns is another effective way to correct rural/urban bias and to create significant synergies between the two sectors.


One can get an access to this article on:
http://www.eldis.org/cf/search/disp/DocDisplay.cfm?Doc=DOC20542&Resource=f1poverty


Source: http://www.indiasocial.org/reseult.asp?id=2951

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