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Subsidies and the African Green Revolution: Direct Effects and Social Network Spillovers of Randomized Input Subsidies in Mozambique

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  • Michael Carter
  • Rachid Laajaj
  • Dean Yang

Abstract

The Green Revolution bolstered agricultural yields and rural well-being in Asia and Latin America, but bypassed sub-Saharan Africa. We study the first randomized controlled trial of a government-implemented input subsidy program (ISP) in Africa. A temporary subsidy for Mozambican maize farmers stimulates Green Revolution technology adoption and leads to increased maize yields. Effects of the subsidy persist in later unsubsidized years. In addition, social networks of subsidized farmers benefit from spillovers, experiencing increases in technology adoption, yields, and beliefs about the returns to the technologies. Spillovers account for the vast majority of subsidy-induced gains. ISPs alleviate informational market failures, stimulating learning about new technologies by subsidy recipients and their social networks

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  • Michael Carter & Rachid Laajaj & Dean Yang, 2019. "Subsidies and the African Green Revolution: Direct Effects and Social Network Spillovers of Randomized Input Subsidies in Mozambique," NBER Working Papers 26208, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26208
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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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