Development Priorities: The Relative Benefits of Agricultural Growth

26 Pages Posted: 2 Dec 2019

See all articles by Fabio Monteforte

Fabio Monteforte

University of Messina

Mathan Satchi

University of Kent - Department of Economics

Jonathan Temple

affiliation not provided to SSRN

Date Written: November 6, 2019

Abstract

Should agriculture or non-agriculture be a priority for development? We revisit this longstanding and intractable question using a two-sector, three-factor dynamic model with an asymptotic balanced growth path. The model allows a forward-looking assessment of development priorities based on lifetime welfare. A comparison of sector-specific productivity gains indicates that gains in non-agriculture are often more valuable, even when agriculture is initially the largest sector in terms of employment. We discuss the robustness of this result, including the roles of capital intensity, the discount rate, and taxes on profits in influencing the rates of investment and structural transformation.

Keywords: structural transformation, agriculture, development policies, investment

JEL Classification: O40

Suggested Citation

Monteforte, Fabio and Satchi, Mathan and Temple, Jonathan, Development Priorities: The Relative Benefits of Agricultural Growth (November 6, 2019). Available at SSRN: https://ssrn.com/abstract=3488290 or http://dx.doi.org/10.2139/ssrn.3488290

Fabio Monteforte (Contact Author)

University of Messina ( email )

Piazza Pugliatti, 1
Messina, 98122
Italy
98122 (Fax)

Mathan Satchi

University of Kent - Department of Economics ( email )

Keynes College
Kent, CT2 7NP
United Kingdom

Jonathan Temple

affiliation not provided to SSRN

No Address Available

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