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Induced Innovation and Land Degradation in Developing Country Agriculture



With few exceptions, induced innovation theories give little consideration to the role of distortions or externalities as determinants of the commodity or factor biases of innovations demanded by farmers. Nor has the theory devoted much attention to the influence of technical progress, with or without distortions, on the sectoral structure of production. This analysis identifies the demand for innovations as a function of a specific policy setting which conditions and is in turn conditioned by the sectoral structure of production. In this context, when some sectors contribute morethan others to land degradation and soil erosion externalities, the capacity for divergence between privately optimal and welfare-maximizing allocations of research resources - calculated at market and shadow prices respectively - is substantial. In some circumstances it may be optimal to employ research budget allocations as second-best substitutes for Pigouvian taxes.

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Paper provided by Wisconsin-Madison Agricultural and Applied Economics Department in its series Wisconsin-Madison Agricultural and Applied Economics Staff Papers with number 398.

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Length: 32 pages
Date of creation: Jul 1996
Date of revision:
Handle: RePEc:wop:wisaes:398
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  1. Harry R Clarke, 1992. "The Supply of Nondegraded Agricultural Land," Working Papers 1992.14, School of Economics, La Trobe University.
  2. repec:cup:cbooks:9780521346696 is not listed on IDEAS
  3. Mussa, Michael, 1979. "The two-sector model in terms of its dual : A geometric exposition," Journal of International Economics, Elsevier, vol. 9(4), pages 513-526, November.
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