Rohini Pande () (Economic Growth Center, Yale University)
Abstract
This paper examines the political economy of coordination in a simple two-sector model in which individuals' choice of agricultural technology affects industrialization. We demonstrate the existence of multiple equilibria; the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization. Relative to the traditional technology, the mechanized technology increases output but leaves some population groups worse off. We show that the distributional implications of choosing the mechanized technology restrict the possibility of Pareto-improving coordination by an elected policy-maker, even when we allow for income redistribution.
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Publisher Info
Paper provided by Economic Growth Center, Yale University in its series Working Papers with number
922.
Find related papers by JEL classification: O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology H10 - Public Economics - - Structure and Scope of Government - - - General
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