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Institutions and Global Crop Yields

Author

Listed:
  • David Wuepper
  • Haoyu Wang
  • Wolfram Schlenker
  • Meha Jain
  • Robert Finger

Abstract

We estimate annual discontinuities in remotely-sensed crop yields at all international land borders and link them to changes in the economic freedom index by the Fraser Institute, a country-level measure of institutional quality. Each point of the ten-point index increases the discontinuity by 2.2% over the next five years, highlighting that institutional reforms have the potential to close some of the observed crop yield gap. Three subcategories are consistently significant: credit market regulation, inflation, and the top marginal tax rate. We present suggestive evidence that higher average yields are achieved through increased use of irrigation and mechanization. Yield variability remains unchanged, and reforms lead to cropland expansion through deforestation.

Suggested Citation

  • David Wuepper & Haoyu Wang & Wolfram Schlenker & Meha Jain & Robert Finger, 2023. "Institutions and Global Crop Yields," NBER Working Papers 31426, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:31426
    Note: EEE POL
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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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