Agricultural Productivity and Income Divergence: Evidence from the Green Revolution

Developing countries sharing nearly identical growth trends for centuries dramatically diverged in terms of income per capita over the last half-century. Using data from 78 developing countries, this study shows that the Green Revolution (GR) since the 1960s can explain most of the income divergence. Beyond the understanding that agriculture growth promotes economic growth, the study shows that developing countries less suitable for cultivating GR crops were substantially damaged by GR-induced grain imports, which increased fertility and retarded human and physical capital formation. A counterfactual analysis removing GR’s effect showed parallel growth trends similar to that prior to the GR.