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Agricultural Distortions, Structural Change, and Economic Growth: A Cross-Country Analysis

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  • Benjamin N. Dennis
  • Talan B. İşcan

Abstract

Taxing agriculture to mobilize resources for industrialization has been a widely used development strategy. Using novel cross-country time-series data sets with direct measures of agricultural taxation, we examine how a policy bias against agriculture affects the speed of convergence in income per capita, structural change, and economic growth. We find that distortionary agricultural policies in poor economies can account for the emergence of convergence clubs in our sample by significantly retarding their structural transformation and economic growth. Overall, we find no evidence suggesting that policies that discriminate against agriculture have been beneficial for long-term economic growth. Copyright 2011, Oxford University Press.

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  • Benjamin N. Dennis & Talan B. İşcan, 2011. "Agricultural Distortions, Structural Change, and Economic Growth: A Cross-Country Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 881-902.
  • Handle: RePEc:oup:ajagec:v:93:y:2011:i:3:p:881-902
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    File URL: http://hdl.handle.net/10.1093/ajae/aar011
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    Cited by:

    1. Grabowski, Richard, 2013. "Agricultural distortions and structural change," Journal of Asian Economics, Elsevier, vol. 24(C), pages 17-25.
    2. Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
    3. Gregor Schwerhoff & Johanna Wehkamp, 2017. "Export Tariffs Combined with Public Investments as a Forest Conservation Policy Instrument," Working Papers 2017.20, Fondazione Eni Enrico Mattei.

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