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INVESTING in Agriculturally-Led Growth: The Philippine Case

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  • Roumasset, James

Abstract

Much of the debate on the role of agriculture in economic development centers on whether agriculture should be taxed or subsidized. The classical prescription for economic development is investment in industrial modernization financed by an agricultural surplus. Proponents of agricultural development have cautioned, however, that squeezing the agricultural sector will stifle the engine of growth and lead to economic stagnation (e.g., Johnston and Mellor, 1961; Krishna, 1967). Instead, they have advocated the opposite policy of stimulating agricultural development through investment and subsidies to the agricultural sector. The 1980s witnessed a widespread recognition that either taxing or subsidizing agriculture wastes resources and reduces the incentives for investment (see e.g. World Developme~R~et port, 1983 and 1987). This leads to the conundrum that motivates the present paper: how can agricultural development be stimulated without distorting the incentives for efficient resource allocation and investment?

Suggested Citation

  • Roumasset, James, 1992. "INVESTING in Agriculturally-Led Growth: The Philippine Case," MPRA Paper 14847, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14847
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    References listed on IDEAS

    as
    1. James Roumasset, 1989. "Decentralization and Local Public Goods: Getting the Incentives Right," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 26(1), pages 1-13, June.
    2. repec:wbk:wbpubs:5966 is not listed on IDEAS
    3. repec:wbk:wbpubs:5970 is not listed on IDEAS
    4. Mellor, John W & Johnston, Bruce F, 1984. "The World Food Equation: Interrelations among Development, Employment, and Food Consumption," Journal of Economic Literature, American Economic Association, vol. 22(2), pages 531-574, June.
    5. Pray, Carl E. & Ruttan, Vernon W., 1985. "Completion Report of the Asian Agricultural Research Project (Contract No. AID/ASIA-C-1456)," Bulletins 8439, University of Minnesota, Economic Development Center.
    6. David, Cristina C., 1983. "Economic Policies and Philippine Agriculture," Working Papers WP 1983-02, Philippine Institute for Development Studies.
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    Cited by:

    1. Roumasset, James, 2004. "Rural Institutions, Agricultural Development, and Pro-Poor Economic Growth," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 1(01), pages 1-20, June.

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    Keywords

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    JEL classification:

    • N55 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Asia including Middle East
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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