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Market integration and structural transformation in a poor rural economy

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Abstract

By developing a simple theoretical model of the impact of market integration on sectoral output and employment in a poor rural setting, this paper demonstrates that trade can induce asymmetric growth. Under certain, plausible, assumptions, the non-farm sector will grow much faster than the agricultural sector when markets become integrated. Promoting market integration may thus be an effective way of encouraging diversification beyond agriculture and catalysing structural change in poor rural economies.

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  • Soderbom, Mans & Rijkers, Bob, 2009. "Market integration and structural transformation in a poor rural economy," Policy Research Working Paper Series 4856, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4856
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    References listed on IDEAS

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    7. de Janvry, Alain & Fafchamps, M. & Sadoulet, Elisabeth, 1991. "Peasant Household Behavior with Missing Markets: Some Paradoxes Explain," CUDARE Working Papers 198579, University of California, Berkeley, Department of Agricultural and Resource Economics.
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    Cited by:

    1. Ms. Louise Fox, 2015. "Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers," IMF Working Papers 2015/102, International Monetary Fund.

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    Keywords

    Food&Beverage Industry; Economic Theory&Research; Rural Poverty Reduction; Food Security;
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