Extract

Both market forces and government policies contribute to urban and rural disparity across the world. In market economies during industrialization, there is a propensity for the rich to grow richer and the poor to grow poorer – what sociologist Robert Merton named the Matthew effect based on a line in the biblical Gospel of Matthew: “For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken even that which he hath” (Merton, 1968). The Merton effect has been most notable in India and Latin American countries, but is also evident in China. Urban–rural disparity can be caused by specific institutional arrangements and government interventions. During the last 30years, rich coastal areas of China have grown richer and poor Central and Western areas have grown poorer because of the Matthew effect. National infrastructure investment, loan, tax, and other policies can contribute to urban–rural disparities between social groups and regions – including urban and rural areas.