Subsidies and the African Green Revolution: Direct Effects and Social Network Spillovers of Randomized Input Subsidies in Mozambique

29 Pages Posted: 3 Sep 2019 Last revised: 12 Aug 2021

See all articles by Michael Carter

Michael Carter

University of California, Davis

Rachid Laajaj

Universidad de los Andes, Colombia - Department of Economics

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Date Written: August 2019

Abstract

The Green Revolution bolstered agricultural yields and rural well-being in Asia and Latin America, but bypassed sub-Saharan Africa. We study the first randomized controlled trial of a government-implemented input subsidy program (ISP) in Africa. A temporary subsidy for Mozambican maize farmers stimulates Green Revolution technology adoption and leads to increased maize yields. Effects of the subsidy persist in later unsubsidized years. In addition, social networks of subsidized farmers benefit from spillovers, experiencing increases in technology adoption, yields, and beliefs about the returns to the technologies. Spillovers account for the vast majority of subsidy-induced gains. ISPs alleviate informational market failures, stimulating learning about new technologies by subsidy recipients and their social networks

Suggested Citation

Carter, Michael and Laajaj, Rachid and Yang, Dean, Subsidies and the African Green Revolution: Direct Effects and Social Network Spillovers of Randomized Input Subsidies in Mozambique (August 2019). NBER Working Paper No. w26208, Available at SSRN: https://ssrn.com/abstract=3446518

Michael Carter (Contact Author)

University of California, Davis ( email )

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Rachid Laajaj

Universidad de los Andes, Colombia - Department of Economics ( email )

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Colombia

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

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