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Market integration and structural transformation in a poor rural economy

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Author Info
Soderbom, Mans
Rijkers, Bob

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Abstract

By developing a simple theoretical model of the impact of market integration on sectoral output and employment in a poor rural setting, this paper demonstrates that trade can induce asymmetric growth. Under certain, plausible, assumptions, the non-farm sector will grow much faster than the agricultural sector when markets become integrated. Promoting market integration may thus be an effective way of encouraging diversification beyond agriculture and catalysing structural change in poor rural economies.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4856.

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Date of creation: 01 Mar 2009
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Handle: RePEc:wbk:wbrwps:4856

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Keywords: Food&Beverage Industry; Economic Theory&Research; Rural Poverty Reduction; Food Security;

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  1. Laitner, John, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Blackwell Publishing, vol. 67(3), pages 545-61, July.
  2. Krugman, Paul, 1998. "What's New about the New Economic Geography?," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 7-17, Summer.
  3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  4. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-417, November. [Downloadable!] (restricted)
  5. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May. [Downloadable!] (restricted)
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This page was last updated on 2009-12-8.


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