Does free exit reduce shirking in production teams?

Article Abstract:

Justin Lin's 1990 hypothesis, attributing the demise of Chinese agriculture in 1959-61 to the elimination of exit rights on farm collectives, does not hold true either theoretically or empirically. Theoretically, exit costs, more than exit rights, support cooperation and productivity. Empirically, state policy errors more clearly produced the stagnant agricultural period. Some of the errors included limited labor movement out of farming, barriers to interregional specialization, disadvantageous price policies, political intervention in management, and ineffective material incentives.

Research, Agricultural productivity

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Exit rights, retaliatory shirking, and the agricultural crisis in China

Article Abstract:

Lin's 1990 hypothesis oversimplified China's agriculture crisis of 1959-61. The deprivation of exit rights may have caused a decline in productivity, although Lin's estimates are inconclusive on this count, but the rights revocation clearly was not responsible for starvation and famine. The collapse of production incentives in rural areas, due in part to the state's reallocation of farm resources, precipitated the crisis. Future study on Chinese collectivism could be improved with the classification of workers into four distinct types.

Noncommercial research organizations

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Exit rights, exit costs, and shirking in agricultural cooperatives: a reply

Article Abstract:

Papers by Dong and Dow, and by Kung, incorrectly contradict the theory that productivity declined in Chinese agriculture from 1959 to 1961 because of the deprivation of exit rights. The Dong and Dow and Kung assertions are based on MacLeod's papers, but MacLeod based his research on the case where a worker has incentive to shirk and quit and Lin based his research on the case where a worker has incentive to shirk and stay. Incorrect assumptions are cited in the Dong and Dow study, and inconsistencies in the Kung paper are described.

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