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Profits and Politics: Coordinating Technology Adoption in Agriculture

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Listed author(s):
  • Rohini Pande

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    (Economic Growth Center, Yale University)

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    Abstract

    This paper examines the political economy of coordination in a simple two-sector model in which individuals' choice of agricultural technology affects industrialization. We demonstrate the existence of multiple equilibria; the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization. Relative to the traditional technology, the mechanized technology increases output but leaves some population groups worse off. We show that the distributional implications of choosing the mechanized technology restrict the possibility of Pareto-improving coordination by an elected policy-maker, even when we allow for income redistribution.

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    File URL: http://www.econ.yale.edu/growth_pdf/cdp922.pdf
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    Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 922.

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    Length: 26 pages
    Date of creation: Aug 2005
    Handle: RePEc:egc:wpaper:922
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    Keywords: Industrialization; Choice of Technology; Government Policy;

    Find related papers by JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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    1. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1989. "Income Distribution, Market Size, and Industrialization," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 537-564.
    2. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    3. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
    4. repec:hhs:iuiwop:430 is not listed on IDEAS
    5. Raaj Kumar Sah & Joseph E. Stiglitz, 1983. "The Economics of Price Scissors," NBER Working Papers 1156, National Bureau of Economic Research, Inc.
    6. Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 441-463.
    7. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    8. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    9. Dixit, Avinash K & Londregan, John, 1994. "Redistributive Politics and Economic Efficiency," CEPR Discussion Papers 1056, C.E.P.R. Discussion Papers.
    10. David S. Lee & Enrico Moretti & Matthew J. Butler, 2004. "Do Voters Affect or Elect Policies? Evidence from the U. S. House," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 807-859.
    11. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
    12. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62, pages 143-143.
    13. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    14. Besley, Timothy & Case, Anne, 1993. "Modeling Technology Adoption in Developing Countries," American Economic Review, American Economic Association, vol. 83(2), pages 396-402, May.
    15. Raaj Kumar Sah & Joseph E. Stiglitz, 1987. "Price Scissors and the Structure of the Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 102(1), pages 109-134.
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