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Induced Technical Change in Centrally Planned Economies

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  • Fan, Shenggen
  • Ruttan, Vernon W.

Abstract

It has generally been assumed that the inferences of the induced technical change model with respect to the direction of technical change could not be expected to hold for the centrally planned economies. In this paper we test three hypotheses generated from the induced technical change hypotheses against the experience of centrally planned economies: (a) if land becomes increasingly scarce new technology will be biased in a land-saving direction; (b) if labor becomes increasingly scarce new technology will be biased in a laborsaving direction; and (c) changes in the land-labor ratio have been induced by changes in relative factor endowments. The results suggest a bias toward mechanical and against biological technology regardless of factor endowments. This is consistent with the well known ideological or policy bias in a number of centrally planned economies toward a capital intensive development strategy.

Suggested Citation

  • Fan, Shenggen & Ruttan, Vernon W., 1991. "Induced Technical Change in Centrally Planned Economies," Bulletins 7469, University of Minnesota, Economic Development Center.
    • Handle: RePEc:ags:umedbu:7469
    DOI: 10.22004/ag.econ.7469
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    References listed on IDEAS

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    1. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
    2. J. R. Hicks, 1963. "The Theory of Wages," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00189-7, December.
    3. Wilkin, Jerzy, 1988. "The Induced Innovation Model of Agricultural Development and the Socialist Economic System," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 15(2/3), pages 211-220.
    4. Shenggen Fan, 1991. "Effects of Technological Change and Institutional Reform on Production Growth in Chinese Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 266-275.
    5. Hayami, Yujiro & Ruttan, V W, 1970. "Factor Prices and Technical Change in Agricultural Development: The United States and Japan, 1880-1960," Journal of Political Economy, University of Chicago Press, vol. 78(5), pages 1115-1141, Sept.-Oct.
    6. Peter Timmer, C., 1988. "The agricultural transformation," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 8, pages 275-331, Elsevier.
    7. Ruttan, Vernon W. & Hayami, Yujiro, 1972. "Agricultural Productivity Differences," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 1), pages 1-13.
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    Cited by:

    1. Shenggen Fan, 2000. "Technological change, technical and allocative efficiency in Chinese agriculture: the case of rice production in Jiangsu," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(1), pages 1-12.
    2. Fan, Shenggen, 1997. "Production and productivity growth in Chinese agriculture: new measurement and evidence," Food Policy, Elsevier, vol. 22(3), pages 213-228, June.
    3. Vu, Linh Hoang, 2012. "Vietnam’s Agricultural Productivity: A Malmquist Index Approach," MPRA Paper 94800, University Library of Munich, Germany.
    4. Shenggen Fan, 2020. "Reflections of Food Policy Evolution over the Last Three Decades," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 380-394, September.

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