Transportinfrastructuur en regionale ontwikkeling in China gedurende de Maoïstische periode

1. Introduction
This project aims to investigate the link between transport infrastructure and regional economic development in China during the Mao era. Economists argue that public investments have a positive impact on economic growth for a number of reasons. As we will elaborate in what follows, the Chinese story contains many unique and intriguing elements which complicate this statement. A thorough investigation of the topic will allow us to better understand present day’s China in terms of infrastructure and variations in economic development. Furthermore, it will provide guidelines for countries which are presently on the path of development.
This PhD project will touch upon several academic fields, among which development economics and Chinese history. In this section we first explore the link between transportation and economic development, after which we turn to the Chinese case.

2. The relation between transport infrastructure and economic growth
2.1. Transportation and economic growth
The PhD project is mainly interested in the effects of transport investments on economic development. Since Aschauer’s pioneering study in 1989, the link between public investment and economic growth has become a popular research topic. Aschauer suggested that infrastructure investments had a significant positive effect on economic production. Theoretically, one can make a strong case why transport infrastructure would have a positive impact on economic growth. First, factor mobility is considered requisite for economic development, industrialisation and growth (Banerjee et al., 2012; Wu Wenjie, 2017, p. 141). Second, a proper transport network reduces both travel time and transportation costs, which increases efficiency. Third, improved accessibility of (remote) regions enlarges the market size. On the one hand, this stimulates local production and development. On the other hand, it improves competition between firms, which threatens the existence of monopolies and pushes companies to explore more efficient production methods. Fourth, free movement of people improves the efficiency of the labour market. Finally, a reliable and dense transport system attracts national and foreign investments (OECD, 2002; Sloboda & Haliemun, 2010; Qu Xiaojuan, 2012; Hong Junjie et al., 2011).
However, although most scholars agree that public investment in transport has a positive impact on economic growth, empirical research finds mixed evidence of the magnitude of this impact. Some authors point out to the fact that transport infrastructure is indeed a necessary, but not a sufficient condition for economic growth (Blum & Dudley, 2002, p. 56; Wei Zou, 2008). Furthermore, scholars vary in their understanding of the causal direction of this relationship. While a bunch of literature supports the idea that infrastructure promotes economic development (e.g. Barro, 1990; Bleaney et al., 2001), others find that transport infrastructure is mainly a result rather than a cause of economic growth. The latter is in line with Wagner’s law, which prescribes that higher incomes will lead to higher public investments (e.g. Wagner, 1958; Verma & Arora, 2010). All in all, empirical results vary greatly depending on which direct and indirect effects are accounted for in the econometric model, and on which place and time are being investigated. More research on the relation between transport infrastructure and economic growth is required, as this will bring important insights for both economists and policy-makers (Montolio & Solé-Ollé, 2007).
2.2. Transportation in developing countries
The past thirty years, the majority of research has been focusing on investments and growth in developed countries. Much less attention has been devoted to developing countries. Transport infrastructure will most probably have another impact on economic growth in less-developed countries than it does in high-developed nations. The Industrial Revolution in the Western world was strongly supported by the existence of trains and railways for the transport of primary resources to the industrial centres. At the start of industrialisation, a transport network is of great importance to make specialisation, agglomeration effects and scale effects possible (Njoh, 2000). Unfortunately, there is a dearth of empirical literature on the impact of transport infrastructure in developing countries. However, recently some scholars are starting to investigate this topic. O’Fallon (2003) finds that the impact of transport infrastructure on the economy is higher in developing countries than in first world countries. Njoh’s results describe a significant positive relationship between infrastructure and development in Sub-Sahara Africa. Mapuru & Mazumder (2017), on the other hand, comes to the conclusion that regional development in India is more or less in line with Wagner’s law.
Disparities in regional economic development has drawn a lot of scientific attention during the past sixty years. Kuznets (1955) was the first to introduce the ‘inverted-U-hypothesis’, which suggests that in the early stages of economic development, income inequality within the country first rises, before it falls again in a later phase. In the following decades, there have been studies confirming this hypothesis (e.g. Lindert & Williamson, 1985), while others have been challenging it (e.g. Alesina & Rodrik, 1994). Until today, theories and empirical results are mixed (e.g. Forbes, 2000; Barro, 2000). Related to this, Williamson (1965) perceived that in developing countries all over the world, there tend to be one (or a few) regions within a country developing earlier and faster than others – causing inequality to increase. This is a peculiar phenomenon, as one would expect knowledge and technology to spread easily within national borders. Williamson considers the absence of a proper transport and communication network as a possible explanation.

3. Transport infrastructure and regional development in Mao’s China
The above makes clear that many questions regarding the impact of transport infrastructure in developing countries remain to be solved. This is especially the case for China in the 20th century, certain unique characteristics of this period make the link between infrastructure and regional development even more complex. However, we start with a concise overview of the socio-economic situation in China during the communist period.
3.1. China during the Mao era
Most scholars agree to date the Mao era from 1949 (the year in which the People’s Republic of China was founded) until 1978 (the start of the economic Reform and Opening). This period in Chinese history was characterised by the implementation of a planned economy and an authoritarian party-state, while the ideas of Chairman Mao Zedong were presented as the national ideology. Both historians and economists tend to emphasize the shortcomings of the socialist economy, which resulted in a distortion of incentives, low productivity and low economic growth, notwithstanding the two ‘disasters’ of the Great Leap Forward and the Great Cultural Revolution. However, much less highlighted is the fact that much progress was made in terms of human development. Both literacy and schooling levels improved, and life expectancy rose rapidly. By 1978, the Gini-coefficient in China was 0.30, one of the lowest in the world (Naughton, 2007, p. 218). Gini thereafter rose rapidly during the period of economic reforms, to 0.47 in 2017 (CEIC National Bureau of Statistics, 2018). While some scholars consider the thirty years of Maoism as a black page in Chinese history (e.g. Deng & Shen, 2018), others tend to highlight the rather positive social outcomes (e.g. Bramall, 2009). This is to show that nothing is black or white: although communism had many flaws, this should not cause us to overlook possible positive aspects.
3.2. The link between transportation and economic development in a planned economy
The Chinese territories cover a vast area with distinctive geographical structures. While the east coast is flat and easily accessible, with a high population density, the west is characterised by deserts and mountains, which makes it a lot more difficult to access. In 1949, China’s road and railway network was rather primitive, although there had been some efforts to expand the transport network during the Republican Era. The first five-year plan was mainly concerned with rebuilding infrastructure after the war. Furthermore, the railway network was expanded inland with aid of the Soviet Union, with the eye on industrialisation (Mom, 2018). In the following years, the construction of roads and railroads took place in the North- and Southwest. On the one hand for the goal of supporting heavy industry there, on the other hand as a means for ‘territorial integration’. Within a socialist context, all citizens and minorities should be united as one, therefore, a proper transport and communication network would make the spread of central policy measures easier (Comtois, 1990; Wu Wenjie, 2017, p. 3). When the relation with the USSR deteriorated in the 1960s, much investment flew to transport infrastructure in the Western ‘thirdtier’
regions, in order to make them easily accessible – and thus defensible against foreign powers. During the Cultural Revolution (1966-1976), transportation was severely disturbed. In summary, by the end of the Mao era, the transport network had considerably expanded since 1949, but the density of roads remained to be much higher in the East than in the Western regions. This brief overview shows that investment decisions did not only stem from economic considerations, on the contrary the government was very concerned with social unification and defence. Regarding regional economic development, one would expect of a planned economy that all investment decisions were made on a national level by party policy-makers. However, reality proved to be different. Although there was indeed an overarching central policy, much independence was granted to the local governments, especially since the 1960s. As a result of this self-sufficiency, cities and localities executed different plans and therefore followed uneven developmental paths (Wu Wenjie, 2017; Démurger, 2001). There exists a dearth of literature on this topic, local party archives should be investigated to attain a more thorough understanding of this phenomenon.
While several scholars have focused on regional economic development in China and its link with transport infrastructure since the Reform and Opening, it is surprising that there are no studies concerned with the impact and planning of transport during the communist era. Only Wu Wenjie (2017) touches upon this topic, but mainly focuses on general planning policies. Researchers concerned with the period after 1978 came to mixed results, but the overall conclusion seems to point to a positive impact of transport infrastructure on economic development. Wei Zou et al. (2008) suggest a unidirectional positive relationship between transport investment in poor regions and economic growth. Banerjee et al. (2012) find that proximity to transport networks has a moderate positive effect on household incomes. Both Wei Zou et al. and Banerjee et al. explain their results in terms of improved factor mobility. Démurger concludes that differences in geographic location and transport and telecommunication networks have a significant impact on
the variation in economic growth between provinces. Yu et al. (2011) find a bidirectional relationship between transport infrastructure and economic growth in the affluent eastern regions for the period 1978-2008. However, for the low-income regions in the centre and the west and on a national scale, the results point to a unidirectional relation in which economic growth induces investments in transport infrastructure. This is in line with Mohmand et al.’s (2016) conclusions for Pakistan.