| On the basis of literature research and empirical research we analysis the implementation of various policy and institution arrangement since the founding of the People’s Republic of China, and find that rural poverty and the gap between urban and rural areas are the inevitable result of deficient institution or insufficient supply of institution. Although the government always transfers income to rural farmers and even continually enacts policies favored farmers, the rural areas are poverty. In order to reduce the gap between China’s urban and rural, achieve the balance development we think the government should guarantee to supply the same institutions for urban and rural people and annihilate the discrimination in the country. |