Something of a Paradox: The Curious Neglect of Agriculture in Development

This paper argues that investment in agriculture has a large and continuing developmental importance in terms of both economic growth and poverty reduction. Moreover, targeted public resources have proven to be indispensable in achieving these results. Both arguments are supported with novel analyses which update and strengthen the traditional case for agriculture-led development with public-sector involvement. But despite the strong case for agriculture-led development strategies, the authors find that over the last three decades the financial resources allocated towards this sector have strongly declined. It is suggested that a shift towards new development paradigms since 1980 might be a significant explanation for this apparent Agricultural Paradox. This conjecture is tested with data on market reform impacts, PRSP contents and analyses of the intellectual resources devoted to the study of agriculture in development by both practitioners and researchers. The authors conclude with a critical discussion of these disturbing trends.

Are India’s Gender Imbalances Inducing Higher Household Savings?

Consumer/Household Economics,

China's Growth Strategies

Food Security and Poverty, International Development, Political Economy,

Something of a Paradox: The Neglect of Agriculture in Economic Development

This paper argues that investment in agriculture has a large and continuing developmental importance in terms of both economic growth and poverty reduction. Moreover, targeted public resources have proven to be indispensable in achieving these results. Both arguments are supported with novel analyses which update and strengthen the traditional case for agriculture-led development with public-sector involvement. But despite the strong case for agriculture-led development strategies, the authors find that the financial resources allocated towards this sector have strongly declined over the last three decades, and they suggest that a shift towards new development paradigms since 1980 might be a significant explanation for this apparent Agricultural Paradox. This conjecture is tested with data on foreign aid, public expenditure, PRSP contents, and empirical analyses of the intellectual resources devoted to the study of agriculture in development by World Bank researchers. The authors conclude with a critical discussion of these disturbing trends.Agricultural Productivity, Economic Growth, Poverty Alleviation, Urban Biases, Public Expenditure, Foreign Aid, Washington Consensus., International Development,

Paving the Way for Development: The Impact of Road Infrastructure on Agricultural Production and Household Wealth in the Democratic Republic of Congo

Given its vast land resources and favorable water supply, the Democratic Republic of Congo's (DRC) natural agricultural potential is immense. However, the economic potential of the sector is handicapped by one of the most dilapidated transport systems in the developing world (World Bank, 2006). Road investments are therefore a high priority in the government's investment plans, and those of its major donors. Whilst these are encouraging signs, very little is known about how the existing road network constrains agricultural and rural development, and how these new road investments would address these constraints. To inform this issue the present paper primarily employs GIS-based data to assess the impact of market access on agricultural and rural development (ARD). Compared to existing work, however, the paper makes a number of innovations to improve and extend the generic techniques used to estimate the importance of market access for ARD. First, the DRC road network data is augmented with survey-based data from Minten and Kyle (1999) on agricultural transport times to calculate improved “market access” measures for the DRC. Second, we follow Dorosh et al (2009) in estimating the long run relationship between market access and agricultural production, although we also investigate the relationship with household wealth. Finally, we run simulations of how proposed infrastructure investments would affect market access, and how market access would in turn affect agricultural production and household wealth.Infrastructure, market access, road and river transport, agricultural production, poverty., Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, Production Economics,

Explaining Agricultural Productivity Levels and Growth: An International Perspective

With persistent population growth, a dwindling supply of arable land per capita, and the relatively high income elasticity of demand for food in developing countries, there is a growing need for food supply increases to originate from growth in productivity rather than expansions in inputs. In this paper the authors construct levels of total factor productivity in agriculture for 111 countries covering the years 1970 to 2000. Employing this data in panel and cross-sectional regressions, the authors seek to explain levels and trends in total factor productivity (TFP) in world agriculture, examining the relative roles of environmental and geographical factors, human capital, macroeconomic factors, technological processes resulting from globalization and the Green Revolution, and institutional factors such as measures of land inequality and proxies for urban biases in public and private expenditure. The authors conclude that, in addition to standard explanations of productivity improvements such as human capital, openness and environmental factors, both urban biases and inequality have been major impediments to successful rural development.

All the Conditions of Effective Foreign Aid

The conclusion that foreign aid will promote economic growth only when allocated towards good policy regimes has been the subject of considerable debate. Aid effectiveness researchers have variously sought to falsify this result or to find other individual conditions of aid effectiveness. However, economic theory suggests that any factor which influences the expected returns to investment may influence the effect of aid on growth even when aid is partly diverted to consumption. To investigate this hypothesis, �all� of the hypothesized conditions of aid effectiveness are individually tested in a cross-country growth specification. From these tests the most significant and robust individual interactions are simultaneously modeled, thereby deriving multiple conditions of aid effectiveness. The paper concludes that aid is more effective in economies experiencing economic shocks or recovering from war, and less effective in countries which are geographically disadvantaged or at war. We also find a previously unidentified condition of aid ineffectiveness: the inflow of foreign direct investment. This finding renews a justified interest in the policy-aid-growth nexus, insofar as domestic policy determines the distribution of aid and FDI flows, which appear to act as substitutes in the growth process.

Happiness and the Human Development Index : the paradox of Australia

According to the well-being measure known as the U.N. Human Development Index, Australia now ranks 3rd in the world and higher than all other English-speaking nations. This paper questions that assessment. It reviews work on the economics of happiness, considers implications for policymakers, and explores where Australia lies in international subjective well-being rankings. Using new data on approximately 50,000 randomly sampled individuals from 35 nations, the paper shows that Australians have some of the lowest levels of job satisfaction in the world. Moreover, among the sub-sample of English-speaking nations, where a common language should help subjective measures to be reliable, Australia performs poorly on a range of happiness indicators. The paper discusses this paradox. Our purpose is not to reject HDI methods, but rather to argue that much remains to be understood in this area