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Why Don't Developing Countries Import More Food?

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  • Michael E. Waugh

    (New York University)

  • David Lagakos

    (Arizona State University)

  • Douglas Gollin

    (Williams College)

Abstract

Most developing countries are far less productive in agriculture than in the non-agriculture sector compared to the rest of the world. Standard Ricardian trade theory predicts that developing countries should be large importers of food and should have few workers in agriculture. The data is in stark contrast to this prediction. In this paper, we explore deviations from from standard trade theory --- with economic and empirical content --- to quantitatively explain this apparent deviation from comparative advantage. In particular, we focus on the role of internal trade costs and curvature in the production possibility frontier, both of which increase the incentives for workers in developing countries to produce their own food.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 1367.

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Date of creation: 2011
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Handle: RePEc:red:sed011:1367

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  1. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
  2. Ina Simonovska & Michael Waugh, 2011. "The Elasticity of Trade: Estimates and Evidence," Working Papers 112, University of California, Davis, Department of Economics.
  3. David Lagakos & Michael E. Waugh, 2013. "Selection, Agriculture, and Cross-Country Productivity Differences," American Economic Review, American Economic Association, vol. 103(2), pages 948-80, April.
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