Exploring the impact of selective interventions in agriculture on the growth of manufactures in Indonesia, Malaysia, and Thailand
With few exceptions industrial policy explanations of the industrial export successes in East Asia are notably silent on the role of agriculture in industrial development. Yet industrial growth can falter if agriculture fails to supply sufficient food at low stable prices, earn foreign exchange rather than use it, release labor to manufacturing, finance the growth of industry, and stimulate local demand for the products of industry. This positive role of agriculture in industrial development suggests that selective interventions in agriculture might well constitute an important part of 'selective interventions explain growth' stories in East Asia. This possibility is explored by empirically analyzing the role of selective interventions in rice agriculture on the growth of manufactures in Indonesia, Malaysia, and Thailand. Along the way, consideration is also offered of the impact of agricultural growth more generally on the growth of manufactures. The argument is made in three steps. To begin with, the selective nature of interventions by governments in the rice economies of Indonesia, Malaysia, and Thailand is outlined. This is followed by demonstrating that rice price stabilization and self-sufficiency objectives, rather than redistribution objectives, dominated rice price policies in Indonesia, Malaysia, and Thailand, at least through the early 1980s. Following this, a simple growth accounting framework is used to demonstrate that stabilization of rice prices and growth of agriculture more generally contributed to manufacturing growth in Indonesia, Malaysia and Thailand. The paper closes by considering the implications of these findings for industrial policy explanations of manufacturing growth and the growth of exports of manufactures in the second tier NIEs of Southeast Asia. Copyright © 2002 John Wiley & Sons, Ltd.
Volume (Year): 14 (2002)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/5102/home|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chee Peng Lim, 1987. "Changes in the Malaysian Economy and Trade Trends and Prospects," NBER Chapters, in: Trade and Structural Change in Pacific Asia, pages 435-466 National Bureau of Economic Research, Inc.
- Rock, Michael T., 1999. "Reassessing the Effectiveness of Industrial Policy in Indonesia: Can the Neoliberals be Wrong?," World Development, Elsevier, vol. 27(4), pages 691-704, April.
- Cameron, Lisa A., 2000. "Poverty and inequality in Java: examining the impact of the changing age, educational and industrial structure," Journal of Development Economics, Elsevier, vol. 62(1), pages 149-180, June.
- Henry J. Bruton, 1998. "A Reconsideration of Import Substitution," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 903-936, June.
- Michael T. Rock, 1995. "Thai industrial policy: How irrelevant was it to export success?," Journal of International Development, John Wiley & Sons, Ltd., vol. 7(5), pages 745-757, 09.
- World Bank, 2000. "World Development Indicators 2000," World Bank Publications, The World Bank, number 13828, April.
- Pletcher, James, 1991. "Regulation with growth: The political economy of palm oil in Malaysia," World Development, Elsevier, vol. 19(6), pages 623-636, June.
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
- Winston, Gordon C, 1974. "The Theory of Capital Utilization and Idleness," Journal of Economic Literature, American Economic Association, vol. 12(4), pages 1301-20, December.
- Egan, Mary Lou & Mody, Ashoka, 1992. "Buyer-seller links in export development," World Development, Elsevier, vol. 20(3), pages 321-334, March.
- Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 641-680.
- Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
- Thorbecke, Erik & Jung, Hong-Sang, 1996. "A multiplier decomposition method to analyze poverty alleviation," Journal of Development Economics, Elsevier, vol. 48(2), pages 279-300, March.
- Levine, Ross & Renelt, David, 1992.
"A Sensitivity Analysis of Cross-Country Growth Regressions,"
American Economic Review,
American Economic Association, vol. 82(4), pages 942-63, September.
- Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
- David, Cristina C & Huang, Jikun, 1996. "Political Economy of Rice Price Protection in Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 463-83, April.
- Edward E. Leamer, 1982.
"Let's Take the Con Out of Econometrics,"
UCLA Economics Working Papers
239, UCLA Department of Economics.
- Booth, Anne, 1989. "Indonesian agricultural development in comparative perspective," World Development, Elsevier, vol. 17(8), pages 1235-1254, August.
- Howard Pack, 1994. "Endogenous Growth Theory: Intellectual Appeal and Empirical Shortcomings," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 55-72, Winter.
- Bruton, H.J., 1998. "A Reconsideration of Import Substitution," Center for Development Economics 156, Department of Economics, Williams College.
- Goldman, Richard H., 1975. "Staple Food Self-Sufficiency and the Distributive Impact of Malaysian Rice Policy," Food Research Institute Studies, Stanford University, Food Research Institute, issue 03.
- Hwa, Erh-Cheng, 1988. "The contribution of agriculture to economic growth: Some empirical evidence," World Development, Elsevier, vol. 16(11), pages 1329-1339, November.
- Michaely, Michael, 1977. "Exports and growth : An empirical investigation," Journal of Development Economics, Elsevier, vol. 4(1), pages 49-53, February.
- Hill, Hal, 1996. "Indonesia's Industrial Policy and Performance: "Orthodoxy" Vindicated," Economic Development and Cultural Change, University of Chicago Press, vol. 45(1), pages 147-74, October.
When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:14:y:2002:i:4:p:485-510. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.