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Agricultural Distortions, Structural Change, and Economic Growth: A Cross-Country Analysis

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  • Benjamin N. Dennis
  • Talan B. İşcan

Abstract

Taxing agriculture to mobilize resources for industrialization has been a widely used development strategy. Using novel cross-country time-series data sets with direct measures of agricultural taxation, we examine how a policy bias against agriculture affects the speed of convergence in income per capita, structural change, and economic growth. We find that distortionary agricultural policies in poor economies can account for the emergence of convergence clubs in our sample by significantly retarding their structural transformation and economic growth. Overall, we find no evidence suggesting that policies that discriminate against agriculture have been beneficial for long-term economic growth. Copyright 2011, Oxford University Press.

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  • Benjamin N. Dennis & Talan B. İşcan, 2011. "Agricultural Distortions, Structural Change, and Economic Growth: A Cross-Country Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 881-902.
    • Handle: RePEc:oup:ajagec:v:93:y:2011:i:3:p:881-902
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    File URL: http://hdl.handle.net/10.1093/ajae/aar011
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    Citations

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    Cited by:

    1. Dieppe,Alistair Matthew & Matsuoka,Hideaki, 2021. "Sectoral Decomposition of Convergence in Labor Productivity : A Re-examination from a New Dataset," Policy Research Working Paper Series 9767, The World Bank.
    2. Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
    3. Schwerhoff, Gregor & Wehkamp, Johanna, 2018. "Export tariffs combined with public investments as a forest conservation policy instrument," Forest Policy and Economics, Elsevier, vol. 95(C), pages 69-84.
    4. Stefan Mann, 2021. "Synthesizing Knowledge about Structural Change in Agriculture: The Integration of Disciplines and Aggregation Levels," Agriculture, MDPI, vol. 11(7), pages 1-14, June.
    5. Jann Lay & Kerstin Nolte, 2018. "Determinants of foreign land acquisitions in low- and middle-income countries," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 59-86.
    6. Gupta, Sargam, 2024. "Inefficient shocks and optimal monetary policy," Economic Modelling, Elsevier, vol. 135(C).
    7. Grabowski, Richard, 2013. "Agricultural distortions and structural change," Journal of Asian Economics, Elsevier, vol. 24(C), pages 17-25.
    8. Alireza Shakibaei & Mohammad Reza Ahmadinejad, 2016. "Investigating the Break and the Structural Changes of Tax in United States," Modern Applied Science, Canadian Center of Science and Education, vol. 10(8), pages 152-152, August.
    9. Mondal, Debasis, 2019. "Structural transformation and productivity growth in India during 1960–2010," Economic Modelling, Elsevier, vol. 82(C), pages 401-419.
    10. Dieppe, Alistair & Matsuoka, Hideaki, 2022. "Sectoral decomposition of convergence in labor productivity : A re-examination from a new dataset," BOFIT Discussion Papers 4/2022, Bank of Finland, Institute for Economies in Transition.
    11. repec:zbw:bofitp:2022_004 is not listed on IDEAS
    12. Nathan P. Hendricks & Aaron Smith & Nelson B. Villoria & Matthieu Stigler, 2023. "The effects of agricultural policy on supply and productivity: Evidence from differential changes in distortions," Agricultural Economics, International Association of Agricultural Economists, vol. 54(1), pages 44-61, January.

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