The Political Economy of Famine Relief in China, 1740-1820

Pre-industrial economies often faced unpredictable and catastrophic risks from crop failures caused by erratic weather patterns, pests, and epidemics. In China, tax exemptions/postponements, as well as local state-sponsored granaries, were used to forestall and curtail the impact of food crises. Relatively little is known about the evolution of these two relief measures throughout China's provinces. A simple model separating resource constraints from agency problems reveals that the terms of famine-relief funding and the command/control structure of the state produced a rational incentive for various local agents to deviate from the objectives of the central authority in a similar way, thus producing the kinds of macroeconomic patterns of storage/relief observable from the data.