Aggregate Agricultural Supply Response in Developing Countries: A Survey of Selected Issues
The authors review several studies of the aggregate agricultural supply response. Using both economic and econometric reasons, they argue that time series estimation typically generates a downward-biased estimate of the response to a credible reform. Even though time series estimates can provide an accurate picture of past behavoiral relations, they do not provide an adequate basis for forecasting the impact of policy reform. This is especially true in developing countries, where policy reforms involve large changes and have included agricultural price reform, industrial trade liberalization, financial sector reform, and macroeconomic stabilization. Under those circumstances, parameters values obtained under the former policy regime have little relevance in the new regime. The authors also argue that investment in public goods should be viewed as complementary to, not competitive with, price policy. They claim that to select the policy with the biggest impact on output makes no sense. They provide what they consider to be better criteria for choosing the best from alternative policies.
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Volume (Year): 45 (1997)
Issue (Month): 2 (January)
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References listed on IDEAS
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- Platteau, J.P., 1993. "Sub-Saharan Afraica as a Special Case: The Crucial Role of (Infra)Structural Constraints," Papers 128, Notre-Dame de la Paix, Sciences Economiques et Sociales.
- Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
- Cavallo, Domingo & Mundlak, Yair, 1982. "Agriculture and economic growth in an open economy: the case of Argentina," Research reports 36, International Food Policy Research Institute (IFPRI).
- Boussard, J M, 1985. "Is Agricultural Production Responsive to Prices?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 12(1-2), pages 31-44.
- T. Ademola Oyejide, 1984. "Accelerating Agricultural Growth in Sub-Saharan Africa: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(5), pages 684-685.
- Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
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