Small Works: Poverty and Economic Development in Southwestern China

Conclusion: The Micro-Oriented State, Development, and Poverty

150 Conclusion The Micro-Oriented State, Development, and Poverty Go to the practical people and learn from them, then synthesize their experience into principles and theories. —Mao Zedong, 1943 Scholars have long promoted numerous pathways to reducing poverty in the developing world, incorporating different state strategies, capacities, and roles. Some argue that poverty reduction is best accomplished when the state removes itself as much as possible from economic decision making while proactively facilitating the ability of the market to stimulate the economy and reduce poverty. Others counter that poverty reduction is best accomplished when the state adopts a leading role in establishing industries that provide employment for poor people, allowing them to shift from agriculture to the more productive industrial sector. Still others argue that poverty diminishes when the state adopts a dominant role in the economy, all but closing off the economy to allow time for domestic import-substituting industries to germinate and grow. Others argue that poverty reduction requires the establishment of a network of welfare programs that protect poor people from the perils of a frequently unpredictable market. A smaller group of scholars point out that, because most poor people are engaged in agriculture, the promotion of that sector will most efficiently reduce poverty. Yet others argue that the state must tackle injustice, redistribute wealth, invest in widespread grassroots education and health care, and empower the poor before poverty will decline. The conditions that allow these multiple—and frustratingly contingent—pathways to reduce poverty are not yet fully understood. Many of these pathways rely on generating economic growth to reduce poverty , but they also work through other mechanisms. Yunnan traversed one of these paths; the developmental state model best characterizes Yunnan economic policy. The Guizhou government adopted a different approach to poverty reduction, one that is less discussed nowadays—characterized by the micro-oriented state model. The Micro-Oriented State, Development, and Poverty 151 As we have seen, the patterns of economic growth and poverty reduction in the two provinces can be partially explained through their distinct approaches to similar features of their rural economies: road building, migration , tourism, and coal mining. These four factors are not the only ones that were important to the economies of Guizhou and Yunnan. Indeed, other factors, such as industrial structure, culture, corruption, and tobacco production , also made a difference in the economies of Guizhou and Yunnan. Even so, as we have seen, these other areas do not explain the differences in economic growth and poverty reduction. Although these four factors proved to be important in both provinces, it is the variations of each of them that explains the different patterns of economic growth and poverty reduction in Yunnan and Guizhou. Thus, the policy choices of these provincial governments , not just cultural, geographical, and economic factors, created these puzzling patterns. In this chapter, I analyze these areas synthetically to derive and explore the overall models that the leaders of the two provinces adopted to change and improve their economies. As listed in table 1 (in the introduction), the models of poverty reduction vary in the nature of the relationship between the state and market, primary goals (e.g., growth or poverty reduction), tactical approaches , scale of the activity, and mechanism through which poor people are expected to benefit. The Yunnan Strategy In Yunnan, the patterns in three of the four areas—road building, tourism, and coal mining—suggest that the Yunnan provincial government followed a form of the developmental state model.1 By and large, the Yunnan government policies related to the tourism and coal mining industries were based on a strategy of market alteration. The provincial government adopted a key role in the tourism industry, especially in the 1990s, by selecting and promoting specific areas marked for tourism development. Government officials proactively established tourist sites and attractions, overseeing the construction and management of hotels and restaurants and the construction of the necessary infrastructure required for tourism. They took a lead role in the planning and development of the industry while allowing private companies to participate in most aspects of tourism. The government hotels and other facilities thus did not exclude the private sector, which took an increasingly important role over time. The government devoted significant resources to the development of the industry, altering the market decisions of consumers, investors, and other actors. In the coal industry, Yunnan 1. Migration is excluded here because during most of the 1990s and beyond Yunnan lacked a discernable migration policy of any kind. [3...