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Structural change, marginal land and economic development in Latin America and the Caribbean

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  • Edward Barbier

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  • John Bugas

Abstract

Empirical evidence indicates that in Latin America and the Caribbean, households on less favored, or marginal, agricultural land form a “residual” pool of rural labor. Although the modern sector may be the source of dynamic growth through learning-by-doing and knowledge spillovers, patterns of labor, land and other natural resources use in the rural economy matter in the overall dynamics of structural change. The concentration of rural populations on marginal land is essentially a barometer of economy-wide development. As long as there is abundant marginal land for cultivation, they serve to absorb rural migrants, increased population, and displaced unskilled labor from elsewhere in the economy. Moreover, the economy is vulnerable to the “Dutch disease” effects of a booming primary products sector. As a consequence, productivity increases and expansion in the commercial primary production sector will cause manufacturing employment and output to contract, until complete specialization occurs. Avoiding such an outcome and combating the inherent dualism of the economy require both targeted polices for the modern sector and traditional agriculture on marginal land. Copyright The Author(s) 2014

Suggested Citation

  • Edward Barbier & John Bugas, 2014. "Structural change, marginal land and economic development in Latin America and the Caribbean," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-29, December.
  • Handle: RePEc:spr:laecrv:v:23:y:2014:i:1:p:1-29
    DOI: 10.1007/s40503-014-0003-5
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    File URL: http://hdl.handle.net/10.1007/s40503-014-0003-5
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    References listed on IDEAS

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    Cited by:

    1. Barbier, Edward B., 2016. "Is green growth relevant for poor economies?," Resource and Energy Economics, Elsevier, vol. 45(C), pages 178-191.
    2. repec:zbw:espost:171379 is not listed on IDEAS

    More about this item

    Keywords

    Latin America; Structural change; Rural poverty; Less favored land; Dualism; Primary products; O13; O44; Q15;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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