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Population growth, agricultural intensification, induced innovation and natural resource sustainability: An application of neoclassical growth theory

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  • Pender, John L.

Abstract

Using a simple neoclassical type growth model including both man-made and natural capital as inputs to production, the theoretical basis for aU-shaped relationship between agricultural intensification and farm household investment in renewable resource capital is established. As development of technology, infrastructure, or markets increase the relative return to investment in man-made capital over natural capital, resource depletion occurs as man-made capital is substituted for lower return natural capital. Once returns are equalized, both man-made and natural capital are accumulated. If labor and these forms of capital are complementary, the output effects outweigh the substitution effects in the long run, leading to net accumulation of natural as well as man-made capital as a result of such technological or market development. Population growth also induces investment in both man-made and natural resource capital in the long run by increasing their marginal products. However, population growth causes declining per capita levels of both natural and man-made capital and production per capita in the long run, if technology is fixed and decreasing returns to scale. The model thus supports the Boserupian argument of induced intensification and resource improvement, as well as the Malthusian argument of the impoverishing effects of population growth. However, population growth may also induce development of infrastructure, markets, and technological or institutional innovation by reducing the fixed costs per capita of these changes, though these developments may not occur automatically. Government policies can play a large role in affecting whether these potential benefits of population growth are realized. In addition, credit policies may reduce resource degradation caused by substitution of man-made for natural capital, by allowing farmers to accumulate man-made capital (such as fertilizers) without depleting their natural capital. Policies to internalize the extern
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  • Pender, John L., 1998. "Population growth, agricultural intensification, induced innovation and natural resource sustainability: An application of neoclassical growth theory," Agricultural Economics, Blackwell, vol. 19(1-2), pages 99-112, September.
  • Handle: RePEc:eee:agecon:v:19:y:1998:i:1-2:p:99-112
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    1. Pender, John L. & Jagger, Pamela & Nkonya, Ephraim M. & Sserunkuuma, Dick, 2001. "Development pathways and land management in Uganda: causes and implications," EPTD discussion papers 85, International Food Policy Research Institute (IFPRI).
    2. Salvati, Luca & Carlucci, Margherita, 2011. "The economic and environmental performances of rural districts in Italy: Are competitiveness and sustainability compatible targets?," Ecological Economics, Elsevier, vol. 70(12), pages 2446-2453.
    3. Ricker-Gilbert, Jacob & Jumbe, Charles & Chamberlin, Jordan, 2014. "How does population density influence agricultural intensification and productivity? Evidence from Malawi," Food Policy, Elsevier, vol. 48(C), pages 114-128.
    4. Majah-Leah Ravago & James Roumasset, 2009. "Economic Policy for Sustainable Growth and Development vs. Greedy Growth and Preservationism," Working Papers 200909, University of Hawaii at Manoa, Department of Economics.
    5. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
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    7. Josephson, Anna Leigh & Ricker-Gilbert, Jacob & Florax, Raymond J.G.M., 2014. "How does population density influence agricultural intensification and productivity? Evidence from Ethiopia," Food Policy, Elsevier, vol. 48(C), pages 142-152.
    8. Ruben, Ruerd & Pender, John, 2004. "Rural diversity and heterogeneity in less-favoured areas: the quest for policy targeting," Food Policy, Elsevier, vol. 29(4), pages 303-320, August.
    9. Josephson, Anna Leigh & Ricker-Gilbert, Jacob & Florax, Raymond J.G.M. & Chamberlain, Jordan & Heady, Derek, 2012. "How does Population Density affect Agricultural Productivity? Evidence from Ethiopia," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124996, Agricultural and Applied Economics Association.
    10. Isabel Álvarez González & Romilio Labra, 2013. "Identifying the role of natural resources in knowledge-based strategies of development," Working Papers del Instituto Complutense de Estudios Internacionales 1305, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    11. Pender, John & Jagger, Pamela & Nkonya, Ephraim & Sserunkuuma, Dick, 2004. "Development Pathways and Land Management in Uganda," World Development, Elsevier, vol. 32(5), pages 767-792, May.
    12. Pender, John L. & Scherr, Sara J. & Durón, Guadalupe, 1999. "Pathways of development in the hillsides of Honduras: causes and implications for agricultural production, poverty, and sustainable resource use," EPTD discussion papers 45, International Food Policy Research Institute (IFPRI).
    13. Chamberlin, Jordan & Pender, John & Yu, Bingxin, 2006. "Development domains for Ethiopia: capturing the geographical context of smallholder development options," EPTD discussion papers 159, International Food Policy Research Institute (IFPRI).
    14. Pender, John & Ssewanyana, Sarah & Edward, Kato & Nkonya, Ephraim M., 2004. "Linkages between poverty and land management in rural Uganda: evidence from the Uganda National Household Survey, 1999/00," EPTD discussion papers 122, International Food Policy Research Institute (IFPRI).
    15. Omer, Amani A. & Pascual, Unai & Russell, Noel P., 2005. "The Economics of Biodiversity Conservation in Agricultural Transition," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24636, European Association of Agricultural Economists.
    16. Wiig, Henrik & Aune, Jens B. & Glomsrod, Solveig, 2001. "Structural adjustment and soil degradation in Tanzania A CGE model approach with endogenous soil productivity," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(3), March.
    17. Neumayer, Eric, 2004. "Does the "Resource Curse" hold for Growth in Genuine Income as Well?," World Development, Elsevier, vol. 32(10), pages 1627-1640, October.
    18. Marco Zitti & Adele Sateriano & Luca Salvati, 2013. "Agricultural Profitability And Susceptibility To Soil Degradation In A Changing Mediterranean Landscape," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 7(1), pages 81-102, JUNE.
    19. Ragasa, Catherine & Chapoto, Antony & Kolavalli, Shashi, 2014. "Maize Productivity in Ghana:," GSSP working papers 5, International Food Policy Research Institute (IFPRI).
    20. Wiig, Henrik & Aune, Jens B. & Glomsrod, Solveig & Iversen, Vegard, 2001. "Structural adjustment and soil degradation in Tanzania: A CGE model approach with endogenous soil productivity," Agricultural Economics, Blackwell, vol. 24(3), pages 263-287, March.
    21. Pender, John, 2004. "Development pathways for hillsides and highlands: some lessons from Central America and East Africa," Food Policy, Elsevier, vol. 29(4), pages 339-367, August.
    22. Russell, Noel P. & Pascual, Unai & Omer, Amani A., 2006. "Economics and Biodiversity in Intensively Managed Agro-Ecosystems," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25663, International Association of Agricultural Economists.
    23. Mutoko, Morgan C. & Hein, Lars & Bartholomeus, Harm, 2014. "Integrated analysis of land use changes and their impacts on agrarian livelihoods in the western highlands of Kenya," Agricultural Systems, Elsevier, vol. 128(C), pages 1-12.

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