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Reaching middle-income status in Ghana by 2015: Public expenditures and agricultural growth

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  • Benin, Samuel
  • Mogues, Tewodaj
  • Cudjoe, Godsway
  • Randriamamonjy, Josee

Abstract

"Using district-level data on public expenditures from 2000 to 2006, and household-level production data from the 2005/06 Ghana Living Standards Survey, this paper estimates the returns to different types of public investments across four agro-ecological zones of Ghana. We then assess the amount of public agricultural expenditures required to raise agricultural growth to 6.9 percent per year until 2015, as this is the target growth needed for Ghana to achieve its goal of middle-income status. The results reveal that provision of various public goods and services has substantial impact on agricultural productivity. A one percent increase in public spending on agriculture is associated with a 0.15 percent increase in agricultural labor productivity, with a benefit-cost ratio of 16.8. Spending on feeder roads ranks second (with a benefit-cost ratio of 8.8), followed by health (1.3). Formal education was negatively associated with agricultural productivity. The estimated marginal effects and returns differ across the four agro-ecological zones. For Ghana to achieve middle income status by 2015, agricultural public spending should grow at an estimated rate of 19.6 percent per year, or by a total amount of GH¢264 million (or US$478 million) per year in 2000 prices over the 2005–2015 period. These requirements are lower if the government is able to achieve a higher efficiency in its public spending than the estimated elasticity of 0.15; this could potentially be achieved by reforming public institutions to improve the provision of agriculture-related public goods and services." from authors' abstract

Suggested Citation

  • Benin, Samuel & Mogues, Tewodaj & Cudjoe, Godsway & Randriamamonjy, Josee, 2008. "Reaching middle-income status in Ghana by 2015: Public expenditures and agricultural growth," IFPRI discussion papers 811, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:811
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    File URL: http://www.ifpri.org/sites/default/files/publications/ifpridp00811.pdf
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    Cited by:

    1. Renkow, Mitch, 2010. "Impacts of IFPRI's "priorities for pro-poor public investment" global research program:," Impact assessments 31, International Food Policy Research Institute (IFPRI).
    2. Benin, Samuel & Johnson, Michael E. & Abokyi, Emmanuel & Ahorbo, Gerald & Jimah, Kipo & Nasser, Gamel & Owusu, Victor & Taabazuing, Joe & Tenga, Albert, 2013. "Revisiting agricultural input and farm support subsidies in Africa: The case of Ghana’s mechanization, fertilizer, block farms, and marketing programs:," IFPRI discussion papers 1300, International Food Policy Research Institute (IFPRI).
    3. Fred M. Dzanku, 2015. "Household Welfare Effects of Agricultural Productivity: A Multidimensional Perspective from Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 51(9), pages 1139-1154, September.
    4. Manfred Wiebelt & Rainer Schweickert & Clemens Breisinger & Marcus Böhme, 2011. "Oil revenues for public investment in Africa: targeting urban or rural areas?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 745-770, November.
    5. Kolavalli, Shashi L. & Birner, Regina & Benin, Samuel & Horowitz, Leah & Babu Suresh Chandra & Asenso-Okyere, Kwadwo & Thompson, Nii Moi & Poku, John, 2009. "Public expenditure and institutional review: Ghana’s ministry of food and agriculture," GSSP working papers 17, International Food Policy Research Institute (IFPRI).
    6. Kolavalli, Shashidhara & Birner, Regina & Benin, Samuel & Horowitz, Leah & Babu, Suresh & Asenso-Okyere, Kwadwo & Thompson, Nii Moi & Poku, John, 2010. "Institutional and public expenditure review of Ghana’s Ministry of Food and Agriculture," IFPRI discussion papers 1020, International Food Policy Research Institute (IFPRI).

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    Keywords

    Agricultural development; Public spending; Investments;

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