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Agricultural Distortions, Structural Change, and Economic Growth: A Cross‐Country Analysis
Author(s) -
Dennis Benjamin N.,
İşcan Talan B.
Publication year - 2011
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aar011
Subject(s) - agriculture , industrialisation , economics , convergence (economics) , per capita income , structural change , per capita , sample (material) , development economics , macroeconomics , market economy , geography , population , chemistry , demography , archaeology , chromatography , sociology
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.