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Distortions to Agriculture and Economic Growth in Sub-Saharan Africa

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  • Anderson, Kym
  • Bruckner, Markus

Abstract

To what extent has Sub-Saharan Africa’s slow economic growth over the past five decades been due to price and trade policies that discouraged production of agricultural relative to non-agricultural tradables? This paper uses a new set of estimates of policy induced distortions to relative agricultural prices to address this question econometrically. We first test if these policy distortions respond to economic growth, using rainfall and international commodity price shocks as instrumental variables. We find that on impact there is no significant response of relative agricultural price distortions to changes in real GDP per capita growth. We then test the reverse proposition and find a statistically significant and sizable negative effect of relative agricultural price distortions on the growth rate of Sub-Saharan African countries. Our fixed effects estimates yield that, during the 1960-2005 period, a ten percentage points increase in distortions to relative agricultural prices decreased the region’s real GDP per capita growth rate by about half a percentage point per annum.

Suggested Citation

  • Anderson, Kym & Bruckner, Markus, 2012. "Distortions to Agriculture and Economic Growth in Sub-Saharan Africa," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124908, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:124908
    DOI: 10.22004/ag.econ.124908
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    Cited by:

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    3. Kym Anderson, 2016. "Agricultural Trade, Policy Reforms, and Global Food Security," Palgrave Studies in Agricultural Economics and Food Policy, Palgrave Macmillan, number 978-1-137-46925-0, October.
    4. 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.
    5. Catherine Komugisha Tindiwensi & Eunice Kabahinda & Fiona Aikiriza & Sylvia Aarakit, 2023. "Entrepreneurial passion and entrepreneurial farming among youth agripreneurs in Uganda," SN Business & Economics, Springer, vol. 3(7), pages 1-23, July.
    6. Tony Addison & Atanu Ghoshray & Michalis P. Stamatogiannis, 2016. "Agricultural Commodity Price Shocks and Their Effect on Growth in Sub-Saharan Africa," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(1), pages 47-61, February.
    7. Abel Tiemtore, 2021. "Examining the effects of agricultural income insurance on farmers in Burkina Faso," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 422-439, July.

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    More about this item

    Keywords

    Agribusiness;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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