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Induced Innovation And Land Degradation In Developing Country Agriculture

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Ian COXHEAD ()

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Abstract

With few exceptions, induced innovation theories give little consideration to the role of distortions or externalities as determinants of the commodity or factor biases of innovations demanded by farmers. Nor has the theory devoted much attention to the influence of technical progress, with or without distortions, on the sectoral structure of production. This analysis identifies the demand for innovations as a function of a specific policy setting which conditions and is in turn conditioned by the sectoral structure of production. In this context, when some sectors contribute morethan others to land degradation and soil erosion externalities, the capacity for divergence between privately optimal and welfare-maximizing allocations of research resources - calculated at market and shadow prices respectively - is substantial. In some circumstances it may be optimal to employ research budget allocations as second-best substitutes for Pigouvian taxes.

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Paper provided by University of Wisconsin Madison, AAE in its series Staff Papers with number 398.

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Date of creation: Jul 1996
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Handle: RePEc:wop:wiaesp:398

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Postal: University of Wisconsin, Dept. of Agricultural and Applied Economics, 427 Lorch Street, Madison, WI 53706
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Mussa, Michael, 1979. "The two-sector model in terms of its dual : A geometric exposition," Journal of International Economics, Elsevier, vol. 9(4), pages 513-526, November. [Downloadable!] (restricted)
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  1. Bayou Demeke & Ian Coxhead, 2005. "The Effect of National Policies and Labor Market on Land Use Decisions in Developing Countries: An Application of Maximum Simulated Likelihood to System of Censored Acreages with Panel Data," Others 0503007, EconWPA. [Downloadable!]
  2. Nissen, Todd & Midmore, David, 2002. "A Bioeconomic Rationale for the Expansion of Tree Planting by Upland Philippine Farmers," Philippine Journal of Development, Philippine Institute for Development Studies, vol. 0(1), pages 85-100. [Downloadable!]
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