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Financing Agricultural Development: The Political Economy of Public Spending on Agriculture in Sub-Saharan Africa

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Author Info
Palaniswamy, Nethra
Birner, Regina
Abstract

Acknowledging that the agricultural sector can play an important role as an engine of pro-poor growth in Sub-Saharan Africa, the purpose of this paper is to identify the factors that influence the “political will” of governments to support this sector. The concept of “political resources” from the political science literature is used to guide the analysis, as it combines the insights from state-centered and society-centered approaches to explain agricultural policies. Drawing on panel data covering 14 Sub-Saharan African countries over the period 1980-2001, we present empirical evidence showing that political factors play an important role in determining government’s commitment to supporting agricultural development. We use a measure of democracy that varies both across countries and within countries over time. Estimates are presented for separate samples of democracies and non-democracies, and for a pooled sample of all countries and years irrespective of the democratic status. Our results suggest that the rural poor do exercise electoral leverage in democracies; larger rural population shares are associated with higher spending on agriculture in democracies but not in authoritarian regimes. We also find evidence consistent with the theoretical prior that larger farmers tend to be better organized in interest groups. Specifically, we find that the share of traditional agricultural exports such as coffee and cocoa in the total value of exports, which may be an indicator for the ability of farmers’ to organize themselves as interest groups, induces greater spending on agriculture. This result holds true for both democracies and nondemocracies.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Berlin 2006 with number 4.

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Date of creation: 2006
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Handle: RePEc:zbw:gdec06:4727

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Find related papers by JEL classification:
H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
H5 - Public Economics - - National Government Expenditures and Related Policies
O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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  1. Keefer, Philip & Khemani, Stuti, 2003. "Democracy, public expenditures, and the poor," Policy Research Working Paper Series 3164, The World Bank. [Downloadable!]
  2. Swinnen, Johan F. M. & Banerjee, Anurag N. & Gorter, Harry de, 2001. "Economic development, institutional change, and the political economy of agricultural protection: An econometric study of Belgium since the 19th century," Agricultural Economics, Blackwell, vol. 26(1), pages 25-43, October. [Downloadable!] (restricted)
  3. Hazell, P. B. R. & Roell, Ailsa, 1983. "Rural growth linkages: household expenditure patterns in Malaysia and Nigeria," Research reports 41, International Food Policy Research Institute (IFPRI).
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