Rural China in ruins: The rush to urbanize China's countryside is opening a moral battleground (Respond to this article at http://www.therai.org.uk/at/debate)

China has officially become a predominantly urban country, with over 50% of the population now registered as urban residents. Its urbanization process has been described as the most managed in human history. The Chinese government manages the building of new cities, regulates the housing of displaced people and controls squatters. As an historically poorer area, the west of China has been the target of ongoing efforts at infrastructural development. Describing urbanization as managed however masks the conflicts and contradictions involved in a process which is far from smooth. Although villagers are usually seen to be largely the powerless victims of these initiatives, it is clear that many try to take advantage of the situation, while others are unable to do so. Based on recent fieldwork and eight years of visits to one village undergoing urbanization, this article looks at the complex dynamics involved and at the moral battleground which they lay bare.     

PRODUCTION TECHNOLOGY UNCERTAINTY AND THE OPTIMAL LOCATION OF THE FIRM*

ABSTRACT This paper investigates the implication of production-technology uncertainty for the exclusion theorem. The paper presents the result that the risk-averse firm facing production technology uncertainty prefers an intermediate location to avoid risk under certain conditions. The firm chooses an intermediate location (over a corner location) particularly if its degree of risk aversion overwhelms the inherent convexity of profit with respect to location. The latter depends, in turn, on the structure of production technology characterized by the elasticity of substitution and returns to scale parameters.     

THE EFFECTS OF LOCAL TAXES AND PUBLIC SERVICES ON RESIDENTIAL DEVELOPMENT PATTERNS*

ABSTRACT. This paper incorporates an exogenous taxing and service-providing public sector into a dynamic residential land-use model in order to examine how local-government fiscal policies alter the pace and pattern of residential development. The model is used to derive the comparative-dynamic responses to variations in the income, sales, and property taxes and public-service time paths. The results show how tax and expenditure effects systematically depend upon the anticipated relative growth rates in rents to alternative uses and vary across locations within a given urban area as well as across urban areas themselves.     

MEASURING THE EFFECT OF COST VARIATION ON INDUSTRIAL OUTPUTS*

ABSTRACT. This paper introduces the household interactive variable input-output (HIVIO) model to measure the effect of cost variation on industrial outputs. The model produces a variety of cost elasticities that separate out impacts on industrial prices, imports, and outputs, with “own” and “cross” elasticity components. Like the conventional input-output multipliers, these cost elasticities can be useful parameters to evaluate the substituting behavior of firms and consumers. By using the 1980 Korean input-output transactions table, we find the wage and import price effects on industrial prices, outputs, and import demands.