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Profits and Politics: Coordinating Technology Adoption in Agriculture

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  • 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
    Date of revision:
    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. Krugman, Paul & Venables, Anthony J, 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers 1015, C.E.P.R. Discussion Papers.
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    14. 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, MIT Press, vol. 119(3), pages 807-859, August.
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