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Unformatted text preview: services at the end of the 1970s. Collapsed • Dural Price System – The government purchased grain from farmers at a lower price than real market price to maintain urban economy stable. – The prices farmers had to pay for inputs such as fertilizer and farm machinery went up faster. – Decreasing incentives to grow grain The Side Effects/Problems of Reform • Local Officials – Significant reduction of power and authority under the HRS system – New Central-Local Fiscal Relations (“Eating in separate kitchen”) – Seeking their own profits brought about institutional corruption. (e.g. illegal taxation)...
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- Fall '10
- relatively small size