Page 1


RURAL

DEVELOPMENT

EXPERrENCE:

ECONOMIC

PERSPECTIVES

by R. Eo EVE_SOI_*

This of

rural

and

the

and

market

conference development.

impacts

of

that

have

That

the

It

goals

and

is concerned

have

generally

few,

toward

government

interventions

Critics I)

is directed

the

broad

issues

with

rural

people

investments, on

their

regulations

well-being.

if any,

noted: projects

objectives

set

have

forth

accomplished

in the

project

all design

stage; 2}

That

the

have

unintended

with

project 3}

often highly under

flawed

the

design

and

skilled

instruments

consequences,

objectives_

That

more

policy

that

and

general

i.e.,

implemented they

were

often

inconsistent

and and

implementation

programs

motivated staffing

that staff,

"work", cannot

of

programs

when

staffed

are by

be replicated

conditions.

Yale University and Philippine Institute for Development Studies. This paper was prepared for the Sixth World Congress for Rural Sociology held at the Philippine International Convention Center, on December 17-21, 1984.


2

Indeed, are

very

to

to produce

ment

economies

their

to

be different.

in

activities

more

in

litate in a

development.

later

The

of

designed

table,

of

the

6).

p_rpose

of

this

perspectives

of

analytic

ming.

The

paper

rature

with

improvement objectives and

discusses

a view of in

approach

of

assessing

the c!_ _ rural

institutional ef_f_s

improved

paper the

_

of

invest

less

and

(this

can

of

economic

contribution instruments and

and faci-

be

seen

the

profession

development

activity these

tends

technology

economics

bodies their

stages

is to discuss

between

development

spending

however,

technology

to rural five

of

today

subsidies

Table

the

spending,

develop-

developing

at comparable

to extend

various

rural

magnitude

countries

to produce

through

general

relevance and

use

of

on

efforts

areas.

contemporary

the

mix

for

in rural

countries

The

designed

_rgject form

spending

in most

Developing

activities its

of

exceeds

projects

development

change

magnitude

far

development

institutional

social

developed

of

rural

rural

programs

generally today's

the

and

the

and

of

dominant

economic

defined,

by

Yet

be the

projects

made

critics

harsh, l/

continues

Broadly

many

the

activities.

programliteto and design

the


The

five

1)

The

Economics

of

Farm

2}

The

Economics

qf

the

3}

Rural

4}

Research and

5)

bodies

are

well

rical

analysis.

The

the

(to prices}

profound

effect

have

been

viewed

the

poorest

of

way

farmers

do respond

patterns

is now

farmers'

behavior

is governed

cultural

makers that

factors

supporting such

policies

in the

has

will

not

The

much

and

supply

regarded the

basic

1960s

supply had

that

even

they

choose

old

view

that

by

can

no

effects.

a

countries

as

disappeared

to farmers

Empi-

general

evidence

predominantly

have

and

in developing

abundant.

low prices

1950s

to prices

pretty

highly

to more

The

analysis

economics.

variables

work

by policymakers.

farmers

Population

production

generally of

this

cropping

and

are

measurement

the

and

in agricultural

analysis

on

Projects

Technology,

management

fields

extension

response

Development

Distribution

fields

in these

of both

Rural

Projects,

farm

established

in terms

Production

FarmProduction

accounting,

studies

are_

Chang_

Income

of

with

_nstitutions

Development and

dealt

Family

Extension,

Economics

Farm

and

Productivity

Rural

The

literature

Markets

Growth

i.

of

traditions and longer

policyargue


In and

the

cost

in empirical

case

maximized

maximization approach

North

India

some

of

duality

that

its

estimates

were

the

states

Punjab,

districts

be

a primarily

wheat-producing

Pradesh

Bihar}

and

(Eastern

Uttar

variable

dictionary

for

the

two

is provided.

and

Pradesh

areas. The

for

the

Abrief variables

such their

skills. full

nature

completed and

profit of

this

a study

level

Uttar Pradesh into

two

Table set

definition

and of

classified

_/

data

from

Bihar.

groups_

Haryana,

rlce-producing

Bihar). data

and

major

(Punjab,

for

demonstrates concerns.

district

area

are

as technology

own

essential

profits this

where

development

a primarily and

functions.

maximize

even

has

using

grouped

and

undertake

the method

Haryana,

functions

I.

rural

obtained

can

exist

author

for

"duality"

cost

and

The

illustrates

The

These

can

This

is produced}

ectually

in Appendix this

place.

the

restrictions

realized.

relevance

of

good

availability,

recently,

on

however,

to many

is not

taken

or minimized

may,

is outlined

Very

one

They

credit

in production

(or transformation

farmers

subject

in practice,

has

when

costs.

availability,

revolution

is base_

than

functions

exists

maximization

Thus,

more

profit

or minimize

work

functions

where

duality

a new

in agriculture

production

in the

This

15 years

analysis

revolution between

past

Uttar area

I provides reports each

a

means varlable

as variable


farm

outputs,

variable

environmental

or

it is presumed by choosing and

choice An

the

or

this

farm

thRt

the

2 reports

data

for

of each

of

each

price

or

input

the

typical

the

significant that price

and

variable

It

farm

analysis, profits

farm

variables

are

outputs

thus

is likewise has

assumed

no control

pooling one

down

wheat

to

the

variables

wheat

supply

is

.370.

This

wheat

variables supply a wheat

price,

of

wheat.

price

the

over

on

will One

increase,

that

all

cause can

data.

the

effects supply in

estimated

effects

on

rice

by

price, (All

respect

and

percent

see

etc., _tatistically

asterÂŁsks.)

prices

a 3_7

holding

By

output

a 10 percent

also

on

example,

with

other

based

For

indicated

means

are

variable.

elasticity

the means

elasticity

the

research

holding

constant,

the

price,

are

the

district

variable

see

at

These

in question.

ol_e can the

all

obtains

variable

of

computed

equations.

structure

column,

way

eight

column,

supply

all

the

demand

first

wheat

of

These

elasticities

a system

reading

the

variable

of

this

fixed

prices.

estimates

the

maximize

variables.

the

and

In

mix

inputs.

prices,

variables.

farmers

'endogenous'

model

inputs,

appropriate

farm

Table of

structure

that

variable

farm

the

to

Note its

own

increase

in

structural increase

in

consequences

everything

else

constant,


not

only

coarse

on

wheat

cereals

fertilizer, across

and

wheat

a 3.7

percent

on

and

tractors

row

increase

increase

also

crops,

labor,

price

a i0 percent

but

other

bullock

the

that

supply

the on

supply

the

of

demand

and

labor

in the

table.

One

in the

price

of wheat

in the

quantity

by

for reading

thus

of wheat

supplied,

percent

decrease

in the

quantity

of

rice

a 2.24

percent

increase

in the

quantity

of

coarse

and

results

the

crops.

output

against

They favor that

mix

in

favor

likewise of this

rainfall

variable

notsubject

hand,

irrigation

are

demand

in

the

and

against

and

perhaps

subject

one

favor

of

hand,

noted,

should

to policy

and

crops. in

however, be

reflecting

presume

therefore

not

may

other

fertilizer

other

fertillzer be

and

create

against

others,

is a strictly

manipulation.

geo-climate

The

variable

and

modification.

intensity subject

investment

cereals

other

It should

and

to policy

Irrigation other

cereals

electrification

coarse

cereals

demand.

factors

rural of

on

biases

variable,

is easily

input

coarse

create

it

favor

Roads,

of

tractor

that

in

biases

labor.

geographical that

indicate

It also

biases

supplied,

etc.

The biases

finds

causes

a 2.07

supplled,

rice,

and

net

to policy increases

cropped

area,

manipulation. all

outputs

and

on

the

Increasing inputs


+"

?

•_+; VacL_ZA_ t_c__

_

XnaLan Oars Set a_mz-_stJamm

"_ illlllt L

_c_

rm

" :1811711, l!t 4319.:IS " SiM_O.20 :_tB33.99 4" "4 .

V_Jla_l

]Pass :]CnFaZs

laiiii ]loilm: •, _ Se_s ]q_'tJJ_m_

u,,,t

• ,d.c.

Ittiii" ,

Imti_l _

_l=a ,cxllps ll_:_m_ _=-_lces

lil_i, i:lleclil_J.tftc_l::t.on (l=_r_m(: "_o£ .'e.l..!._i.i,_s,p+_c_it't,,_t)

_

P,[ctl

c_ i._esi Vac_.l_cilt_ (_:x---

lla_iez high yiclCtinq+ vm:c:_m:_e+n Ill' z_Lce, _a_ allcl _.li;e_ i,ri-tglit,iml Intensi.c¥ (+erc_nm - ill gz'oml cz'oppl_l lie_l ii-c.i,_i4-

10134.76 22083.35 4467.06 16114.3S

' • ." 32006°25 41818.24 211141.].0 S013g,9S _kO3B.O4 2_.74 41SS.17 :r:41.76

30112.111 33417.90 718.4;! _36.0S

z.mu

lo=,i

;I.','S.,,'IS

_.21

, =.osal "1.],_4 2.898 2.041. "Z,'i"lO 1.577

.2,.r.,9 z,_ 3.188 :_.I_L 1.3T1 1.577

311.99 ',

1,.49

11++.,,?'91

.

.8_S

?+..Ill5 .+ '.

40 +,_._ ?_5.3"1. CIopped _zea (000 l_el,.'-C_l=_llt ].2_+_'t 17_.1+._:t S_u (nel: cro_*d +i',e_;J" " +mr ot cs_.civac-ors) +,OOi'# .+.222 lllrlcillm:li _ll_r _,+cs/_l'_ml+ .21iiJ °430 miles _

are Xicec_=e;

16360.88 Z15BG. 44 $172.1G_ 2ZSS?.T8

.

ltlmlaz'cb _Cx'._n_i._.'_m+(clmf!i-

I_nd_t_ras!_ IUgh l'leldiliq

_

Oult:puC.s

P.LC_ ¢mzmtX _aJam Or3_: Cz'a_ 3.

nn

25.80

Ir11.13

z.ss4 :i.2tli 3.1iS8 :_.070 1.619 i.,5"i7

+"

2.]_3 *. Si.17 34.57 14_'_Io78 .OOi .332 26.34


lU_.e. 2.: Slut/r..(W

:.

td.t,,b .370**

_.tLce

"_._

Cexeel _ _

_

-.oSe .oG/,

l_Uo=k _rJ.c*_ 12am:mr ]Price

E_,zJ,Zlc_lr..taa

.

.OOS ,,002

-.440 _ .038

",.079

" *.038

-,.139

,,271_m

eAsyl:_Le ee_Ls_sj_tJ_

*t*

.o:r3

,,r2.0 ):* 1._

"1_" =, 2.0

e'

' ,g_tS --. 01.t

Iht.

It_ma_'cb

-.15S

.1_i*

2.,,1,23_e

:l]lU_a

*.IN

,...040-

-.024 *_'

I_"J_lg,St.J._t Z_.,

_lrV'*S

".030

.0_

..4GSee.

.,224 •

.-.007

.176"*"

_,._7,_ r"

$ J.._e

-.03]L

-,..227.

.852 e

C.,_lRilad ._

"

B:_,.1.ock

-.oSo

.011

I'mL

..n'_

;,-.D"/6

O_:hec

.040

.-,019 .003

*.23,_ H

.324-

s_: iSS91,-lS?S.

.-.NO

.,042*

-.02S ,001

P_r_

-.307"* .392**

.073*

]_rJ.c:

rez,tLllzez

D._,,,*t=r_.._ _::a

_

Ilblmt _ Dm.ru

Zs'l:Sas'ixmt ],ms'th _

.',046

.34a**

.245*'*'

.,,3"_3ee

".362 te

" .3,25 ee

.271"

._lCJe*

.:r?6**

1'485 e*

1.048 e*'

.iS09 e*'

"%051.

-.044_'*

.11.2

.on**

--.016

-.038*", • •-,010 -.001

'

.180

.132-,,"

-,010 -.084

.04S** -.155"*

.G23"*

--.103

-.{}lSl e*

".006"*'

.034

"._6

ee

.

.,-,*.*_tl 'e

.289

',,',,,022

-,1.266' '_

,.,-.744 e'e

._10_*

".074"*

".128 e*

.2S'r** .24s e_

'

.a/1

1.1151"*

-.311=,**

,,176 "e

.OC_

-.OOS

.056"*

.,,..(127

-.].02 *,_

.001

1.203"*

.379"*

...08s e,)

.020

.006

._l,'J_e

.084 *e

.G16

.O&O_'*

.012" -.002

.693"*

-.122"* .$'t7 _,*

-.GAS': .02S

. _I.'_* .042 .,,. 285t*

.O:SQ" -.084

*e


I0

The hand,

Indian

has

appears

a strong

_o

have

It produce8 using

and

type

quite

in

favor

strong

technology

llneof

planning of

b_as

research

that

of

system, other

biases

on

on

the_the_

crops.

th_

It also

input

ia fertilizer-

and

side째

tractor-

labor-savlng.

This

way

agrlcultura!

and

anal_s_s

programming

e_aluating

programs

the

on

the

makers

are

in the

agricultural

example,

relevance

in that

actual de_and

concerned

that

has

with

of

farm

_ogr_m_

sector_

_rri_ation

it enableB

impact for

to rural am ore

rural

Many

to increase

investment

consistent

development

inputs.

_t is o_ten

development

pollcy-

employment

pres1_d,

will

for

increase

the

demand

J

for

labor.

is th_

Th_r_

case.

of this

i3 _c _ p_o_i

Stud3e_

_s

this

for

one

knowlng

India,

it

appeaEs

in irr_.gatio_

h_:: a small

impact

on

the

It has

impact

a huge

on

Studies

o_

this

response

of

farmer_

They

_re

crodit

suited

for

programs,

In a later

section

effects

farmer

of

_he

type

can

for

to measuring

behavior_

issue will

of be

investment

for

tractors

labor.

and

fertilizers.

in identifying

development

restrictions,

(4}, the

that

demand

be helpful

to rural

example

supply

d%mand

if this

_:llow tl_e measurement

_n North

the

effect.

such

basis

pro_ects.

the

input

effects

of

sl_bsldies,

the

macro

taken

up.

or

market

etc.


production

and

(or seldom)

marketed

(or should and

production

goods

and

The

"valued" Modern

income,

chief

of

development

household

child

of

major

has

been

behavior.

the

question

_of of

context

of

the

studies

of

time

_type.

but

not

are

analysis how

goods

prices

allows the

will

be

of marketed

this

for

rural

is that

the

chief

objectives

are

allows

one

to

schooling,

of

family

household

leisure,

fertility now

size.

investment

formulate

household

literature

exists

in health

allocations

have

often Modern an association

etc.. work.

To

,e_onomic

dealing literature

and

schooling

In addition, been

and date, analysis

(or contraceptive)

A related

model.

or

goods.째

in empirical

of modern

analysis

usually

non-marketed

variables

A large

determinants

the

of

these

application in the

ofthls

however,

these

projects

health,

rural development the

health

i development

programming

economics

between

of

relevance

An terms

and

child

be

time.

and

stated

can

goods

way,

are never

no prices

household

wealth,

projects rural

that

by parents

consumption

labor

which

Children

An a rigorous

and by

for

goods

represent

priced.

to state

affected

and

schooling

or

of

observed.

are clearly

marketed one

be)

child

They

consumption

made. 3/

with addresses in the

a number

of


13

Appendix aspects

of

household

2 sketches

the as

some

household

both

model.

a utility

pEoducingor

cost-mlnlmizing

of

goods

household

etc., chooses

the

marginal

mix

costs

prices,

it

members,

of

process

equations

These variables

goods

of

the

control

the

exogenous

exogenous

the

services.

land,

development

Many

of

policy

and

productlon

cost.

It then

according rather

skills, wages

by

to

than

market

household time

of

and

non-labor

household

home

endogenous

produced

in the prices,

goods}

short wages,

technology

variables

instruments

family inoome. demand

goods.

measurlngconditions

inolude

their

the

of

relate

household

a

a minimum

produced

these

unit

the

food_

goods

household

skills,

treats

prepared

derivation

varlables

variables

capital,

the

model

health,

constrained

demandsquations

of

at

prices,

household

(i.e.,

set

child

management

allows

for

as

course

technloal

In the

"shadow _ prices

home

market

unit.

household

or

The

more

maximizing

to produce

is of

technology,

This

such

it attempts

of the

are

and in

in one form

choice to a beyond

run.

These

household community fact

rural

or

another.


14

One of is that still

the

it shows

make

likely most

the

example,

consumption schools

in

school

is

llkely

and

members

child

endogenous

(time

and

in the

is known health

a program

variable

will

relationship

have because

not

as

and

the

evoke

other

can

•factors

earn

breast

in the feeding,

of

household

mnde[

child

that

one

have

other

that

another

breast

cannot

by

is

the_production feeding

conclude

a change

predicted

allocatlon

between

and

when

reduced

produces

impact

inferred

health}

Even

the

a response

and

be

of

availability

time

cannot

For

consumption

that women

the

or

targeted

alloc_tlon

work

is

control.

food

only

consequences),

it may

in all

mother's

(i.e.,

the

variable

in the

(say

that

poor,

program

time

feeding).

impact

how

Similarly,

causality

variable

_ome

in fertility,

contribution

relationship

that

of

wages

as well

that

of modelling

program

the

in child

changes

in breast

adverse

even

but

spent

has

change

will

illustrates

one

to

children

health

matter

supplement

for

A further it

food

goods.

induce

no

it has

non-food

will

type

by the househQld

of

A rise

this

a given

which

or

attendance

as well. market

over

aid

family

nhat

a response

food

to children

of

households,

and

things

a

of

that

choices

to cause

of

other

contributions

in one the

impacts

production as well.


15

Pot

example,

women

will

feeding

has

reduce

itself

it cannot adverse

be

health

fertility

Use

variables

analyzed

child

was

and

The Completion by women

of

pregnancies,

were

variables

out

class

having

the

1976 .403

primary

fewer

above

mothers children

school.)

can

The

now

be

endogenous

secondary, in _he

variables

with

schooling.

with

primary

schooling

mothers

months and

indexes

illustrated.

in contraceptive

also

National

children.

primary

Schooling

1973-76

1980

than

than

in Data

the

use

a reduction

are_dummy

less

of

(primary,

increase

use

pregnancies,

contraceptive

produces an

the

study.

of

the

its

(WFS), and

malnutrition

schooling

schooling

of

fed,

discussed

and

WFS,

numbers

it

in Panama.

Survey

in the

have

effeCtS.

utilized

health

in _anama

used

are

related

have

will

is because

3 illustrates

child

Survey

chronic

clearly

in wages

and

breast

consequences,

This

that

Fertillty

b_ast

point

rise

fertility

and

World

Survey

acute

and

Table

1976

the

for

if reduced

health

consequences.

framework.

Nutrition

of

that

opportunities

Even

child

studies

Contraceptive

last

adverse

many

of

and work

feeding.

concluded

are

household

the

breast

effects

There

from

in wages

has

child

income

a study

a rise

who

clearly

did

and

university}

number use. the

not

impacts

(The

left-

Thus, had

of

an

in average

complete negatively


76

on

breast

health the

feeding

consequences

data

reduces

show the

Even

periods. per

that

se

though

this

(as estimated

schooling

probabilities

of

in

has the

adverse study),

of mothers

significantly

both

and

a_ute

chronic

malnutrition.

Although here, _/ the

one

point

Table can

just

say

prior

fertility.

An

measure

impact

ooverage

and

fertility

provision

have

little

services

effort

child

lower

are

also

of

services child

health.

fertility

and

by

the

system.

issue.

security

programs

However,

it cannot

of management

and

fashion.

analysis It have

can show

an

_mpact

provide design

of

that and

fertility

health

on

these

systems

that but

may

is because

and

forr_ it

the

on

incidence

insights

insights

security

security

the

the

to

indicates

This

provide

on

services

Social

poor.

can

social

health

reduce

not covered

work

study

of

lowers

the

consistency

An the

evidence

for

of

that

negatively

government The

in detail

illustrate

shows

!evels

not

type

to

made

but

This

indirect

serves

different

on

discussed

impacts

health.

impact

of malnutrition they

of

be

It also

was

of health

also

this

to marriage

provision

and

the

that

not

discussed.

experience

the

3 will

into

the

social takes.

effectiveness except

in an


/

3!

h_:Lm4tol

|coumcrLo

o_ t_8 KouJehold

,

Hodel foz ]?tnoJ_ Kontbs lresoC

• ._ _.mber

ot _.re_Mncte.s_.

: I'ed

('1.5>"t",2

o

xx"£">2,0)

_O_4

' " =. .....

llll]_tfi¢|411

,_orr.l.na

_ ....

Co_tra_epc_,_ s

'

8_e_1-

FLlle

Um...e76WS_ _ " Last 1_1c • C1oso4 Opo_

1 , •

" OW_

D_pendent _oSeno_a Ysrlablos J.o _renCal

Schoal:Lns

'["[oChe c' s Cons). Kor.h_' s Coarp. S_con/i_ry F_l.l_e._' s Comp. U(,t_ecsLr_y

-.808' -.91g**

-2.7S7'*

.177

)'_c_,er' _ _l_ge

_ublte

"

._?0

1.30t1"* °115 1,087'* .U47"*

Secu_rU:y

-2.$00'_

-,C;6

-i,32. _ -.90_*_ -.7394k -,267 _

,_79"*

I.&S2**

'"

-..O].O

.003

.4_3" .338

.2_1

oOSO_

-.071"*

,l_l

,858"*

,792"*

,05_*,*

-o026"

.137

.866**

1,092""

,001

o.000

.001

*.199

. .l;7

.l_l

.6626_

,;Xt? ' ,23_ .21e .799

• ,

-.O08g '4 " ,'o007_ _*

-.00058.*

-.005"*

_ "-,_l

.162

.017 ,007 -,004 ,GOJ

-,005

,llO -.2&$* ,05_ .046

,020

-,113

.127 .&18"* ,447_i +1@_

";17¢

1,01)**

-_:_(3_ . -,347

._,._la* -2.$_3_*

-,02_

-,D18 .256_ ._i41;** ,11)f

-.lO$ Oo051 .072 ,O_|

-.411"_

-o141*

,1_I

.714

, -.081" ,_13*_. . -.041 -.077" -,015 o01,i)

.2iS4 .037 ,$J3_ ,-,Z0$ ,,]L40 0,34_. -.063 ,-,$74

,049 ,_7 .$t3 -,$$I

-.69 .009

-,195 • .094

,011 ,,113

.II13 •-.-,13_ ,271 ,_L .,..0(1_"

:

'557*

,005

,127 , .ILl,

ServLc_D

tteslth Se_vJ.eo8 •SOcL;I SecurLty Soct-I

0]..&16"_

-1.252** -. 839"* -,5_5'* -.2_9 *j'

• _or

_.

-1,2_2_*,

-.CO0

-._17"*

_t_(esslonal Sk111_ Szles k_1_ed U_sktlled I_o_k

-2,239**

,OOO

X _OOR

ll_s!_ IOOA X:_urml Os;her k_r_t Oc_e_ _ru_m Hove_ _ralIJ_ba_ 'Z'ow-ur_,_

-1,2_3" e

I

Father's YIlS X Hoch_:a Y_S P:Iu.

_

-,015

. *,_N

o111 .Oil ' -

" .*.001, .000 _,l)lllel *,00_


18

Studies rural the

The

value

sum

or

full

affect

the

Home

technology

are

pol!cymakers

parts

as important accepted

as

evenly

farm

income

hom_productlon consequence, 2 in the countries. Ordinary

activities the

poorer As rather

ratio

of

economies a result, than

Were

full

that

_ull

real

at

for of

least

inuome

tO be

real

income,

income

is more

income

income

development become full to

home

change.

to ordinary As

and

in most

of

to

concern

is

is ordinary

economies.

of

world

measure

probably

than

management

areas

developing

as ordinary

of women

production

meaningful

distributed

poorest

home

differed

conven_iona

contribution

priority

noted

children

measuremant

of

income.

is measured

home

Full

value

ordinary and

productions.

further

ratio •of•full the

the

would

be

the

though

a more

thissituatlon

It may

high

of

as

it

production,

not

even

of

the

in

income,

income. _/

double

These

perception

development.

rural

to whether

production

ordinary

full

of women

income.

home

incomeand

roughly

contribution

according

income

and

of ordinary was

and

measured

production

productlon-relative

allocation

households

of home the

greatly

the

uime

Philippine

income-home

of

incom_ full

that

is highest takos

or

falls

place,

so in

_rowth income

from

the

the in

industrialized.

income

1.3

and

many As.a

over

high

income

is overstated is measured,

z/

when


3.

Rural

Markets

Many

rural

services

holds.

Credit,

example, tenant

been

that

such

Braverman fanuers

other

a ceiling

Landlords

will

by

lower

Paying

If the the

tenant

landlord

rates

and

A new has

emerged

the

link

previous

and

in recent

the

will

studies

markets

that and

when

e_loy-

transactions be

With

For

show

with

a

ineffective.

reduced

charging

land

more

rents

for credit.

institutional

charge

credit,

higher

interest

be broken.

the

years

production

function.

fa_er_

_or

to

on

of

dealing

credit

may

not

literature

between

of

with

will

fun_tlon

incomplete

(1984}

rents

be able

may

"interllnked'.

be provided

link

section,

production ments,

wa_es

house-

rural

"transaCtionsc0St"

of

sources

up

to

Studies

are

land make

will

the

on

to

a number

interlinked

_imply

can

of

presence

have

through

landlord,

focus

Srinivasan

do not

than

high

/

d_signed

markets

and

markets

and

input

years.[

in the

are

avai_iable

and

the

in recent choice

shown

ment

currently

markets

have

contractual

projects

insurance

by economists

have

not

Incomplete

environments

XnsÂŁitutlcns

d_velopment

provide

poorly.

an4

agricultural as and

household With

operate

low

well. _/

household It

focuses

consumption. model

their

farm

I_ the

included

transaction

on

a:_az_ •

cost

enterprise

environ_"


20.'

independently.of

their

are

in all

price-takers

profits Thus,

in their farm

When

J

consumption

outcomes

than

will

is

markets,

income

have

lost.

would

high

and

occur

One

An the

puts

but

transaction

can

net

(dee Appendix

production

this

If they

simply

consumption

Farm

decisions

decisions.

constraint

affect

markets

"recursiveness" by

full

income

reverse.

consumption

not

be

produce

presence

the

costs,

will

2).

this affected

different

:of perfect

markets.

Labor

markets,

transaction markets

costs. _/

do

not

In others,

are

important

feature

economies

with

and

limited

production

on

job

communication made,

searching

firms

environments

of out

by workers

the

move

other

and

away

and

family

means related

for

infrastructure from

a family

for

work.

In the

an poorest

means,

institutions, enterprises. controlling

much The "shirking"

transport,

investments labor

These

constitute

As

work,

change

transport

costs.

labor

situation}.

markedly

They

financial in

their

development.

communication

provides

and

of

can

impacts.

economic

is carried

itself

the

costs

high

high

formal

very

development

family

areas,

and. supervising

of

have

this

program

poor

rural

to

analyzed

cost

development

some

tend

(Chayanov

for workers

transaction

rural

In

exist

there

searching high

in particular,

are

syste_u and


21"

specialize. realized from

large

in many

part

of

countries

the

gains

productivity

Isattrlbuted

to

these

gains

specializatlon.

High

transaction

behavior show is

A

as well.

that

lower

the

fertility

larger

farms.l_/

family

members

reduce

the

member

makes with

farm,

the

to

family

the

where

displaces

accounts

with

transaction an

added

they•hire an

family

labor

on the

family

and

involved

costs

house-

This

labor

where

for

added

costs.

hired

la_d

households

contrast,

of

data

little

households

high

By

family

Philipplne

•with

that

transaction

cost

on

of

farm,

household.

byhigh

other

the

land

affect

because•for

contribution

member

and

fertility

contribution

economic

the

based

households

is so

off

sufficient

increased

of

This work

environments work

to the

economic

is

vision

Recent

relative

holds

cost

member

is because

the super-

with

the

hired

worker.

A

second

line

wQ_

ur

is now

emerging.

This

forces

that

institutions

and

other

Section variables

shape

public 1 of

and

this

were

research

private

paper

included

w_u_,

uea_

_.._u=u_v,La_

is concerned such

as

irrigation

investments.

(Tables in the

I and farm

with

2),

production

the systems

Recall a set

_,,_w

that of

in

structure

analysis.


22

These

variables

which

is determined

The

first

outcome in

class

of

market

are

processes

along

stocks

cumulated

of

past

can

affect

investment

also

has

an

process

run

also

on

the

mlnants (These of

this

public

first

class

sector

publlo (i.e.,

activities}

population

second

of

influences

variables

class

pressure of

,-

variables.

Table

(through

Since

processes,

effect

decisions.

directly

of

long-run

fundamental

in the

in public

market

indirect

other

and

class of

influences

class

the

investment

second

varlables.

first

investment

long

with

the

the

The

investment

economy,

market

sector

consequences

the

density

as

electrification

class.

on f_'s

Population run

determined Public

the

neltherof

maxiMisation.

roads,

are

density,

process)

variables.

sector

profit

process.

that

of

classes,

variables

based

characteristics

long

broad

simple

in this

variables

polltical

two

(and extension},

Population

the

by

includes

programs

includes

into

a political

research

credit

fall

4 reports

for

both

classes

estimates

will

paper.}

The

Sector

elasticities of

investments.

structure

variables

be'further first

of

panel All

for North

utilized shows

deterIndia.

in Section

determinants

determinant

variables

5 of


23

a_e

defined

for

the

as

"lagged"

average

investment

of

variables

the

(i.e.

5 years

is measured)

r they

preoedlng

which

also

the

azemea_

allows

year

for

which

a recurslve

model

ÂąnteEpretatlon.

Population one

thousand

It appears wmnt,

has.

of

to have

rural

oonsumPtion research. small

density

ratios

The

HYVs

other

states

are

(at the

on

level

appear

research

total

cropped

research

estimates

second

market

for

determinant

extension in

panel

net

less

of

variables, cropped

on

however,

has

large

and

research

credit

is

spending.

spending

investments appears Finally,

in to as

expanded,

proportionately.

4 provides three

area.

spending

very

spending.

farm

Higher

has

regions

than

invest-

level)

research

thedistrict

of Table

determinants

higher

extension

of

ÂŁnteEest.

research

district

local

per

provision.

to

geo-climate

expands

process and

and area

spending

The

stock

credit

populatlon

partlcular

on

literacy,

to reduce

in similar

stimulate

of

research,

"borrowab_e"

net

impact

related

Imported the

is of

gins

effects

all

a negative

Urbanisation

while

land)

and

effects.

intensity

arable

as rural

electrlficatlon

positive

and

(defined

elasticlty

long-run size,

As with

(or dependent)variables

investments

irrigation the

first

are

lagged.

panel,


24 'l_x].e4.

Det:etzLNml:sof _:

I. I_-I:e_

of _bZic _on

i_latat(_ De_lL'y

-1.465 _

(_r_:_i:: Orlaantsat:i_ l_t.io '

_Jt_cio_Ltaace

Sect:

_vestnmks

_

{CZmS

_nges

.10

.02

-.03**

1.29"

-.59

.09

-.06

-.02

-.19"

.07

in

.02"*

Pcov_JJ_n(

-.08"* .06 .06 !

lat_e,_'y Level

1.95"*

2.05**

I_V' s

- _20"*

-.01

o01

.12

.21"*

-.01

-.02

.04**

Borne l_meaJ:Ch

.83"*

.52"*

.02_

lqet A::eaCzoR:ed

.71"*

1.17"*

-o28"*

.00

.00

.03

._

.lu

.04,

in _ _ea

R2 F

.02

.s_ 3.0"/*

"

56.4

4.9

.04

.01

-.01

-.01"

1.9

.0,1"*

../_ ./3.2


__ Xl. m_te_

_-_aj

_

of Lo_

(ci_ xx)

_z_

2rzl_t_um_

i_ Icm

-.RA*

.61_*

1.25"*

.67_._ 1.66"

LiteEacy ._**

5.00.* _

Hi_ 71e_ei_ Va.rJ_e4:_es l_se_c_ Xnt_L-y _ton _t-y

neotm4ftcat:i_r_ (_e_t JL_o-91si(xl 12 1;' _es:

-.10"* .47"*

-.24"*

.11.*

.32"*

.11_

-.21"*

.32_

.08

2.51 t*

.01

._**

-.71 .671 82.7

-.01 .$62 51.1

.550 ..45.23

__ot.ic-,iT,, > 1o5 and< 2.0 **As_o_c "i" > 2.0 valuesare elasticitiescom_outed, at samL_le mea_s


Population affects

farm

effects

on

Farm

size

density,

aize

by

extension

Since density

population this

induced

other

now

population be

population factor

"traced" induced

demand.

net

but

panel,

positive cropped

consumption

area.

inequality,

negatively

so

picking

contains is the

variables,

component

independent

second

strong on

by

equation

investment

are

and

elasticity

for

the

affected

credit.

Other

research

variables

The can

its

is controlled

these the

and

density.

in the

intensity

in has

affected

structure

variable,

population area

research

each

and

intensity

is positively and

shown

negatively

irrigation

literacy HYVs,

as

as

that

shown the

total

such

equation

a popu_latlon effect

as net

may

have

cropped a

in panel

two,

coefficients

for

up effects

not

of

but

associated

with

variables.

density

effects

through

Table

shifts

in Output

measured 2 in

in Table

Section

supply

and

4

1 to obtain variable


27

Table

'

;-..

::

• •

Population Induced Shifts in Output Supply and Factor Demand

;

.

,.,

.531

Supply

Coarse Supply

:

1.080

Cereal

•-

--

Demand

Fertilizer

Demand

Bullock

Labor

Tractor

Demand

1.033

Demand

.004 -

.008

1. 300

Other

Crop

Supply

.575

Labor

Total

Crop

Supply

.670

Variable Demand

,,

-

_-

:--

Table in

:_i_

Factor

Supply

Rice

,

Supply

Output

Wheat

5.

terms

5 reports

of are

induces

changes

Thesame

variable

input

not

costless.

and

research

produce

changes use.

Of

course,

other

F_c.tor .174 :

.......

that

":

structure

have

quite

the

of

investment

induces

increase

in

change

in

percent

area

output

density

percent

changes

density

large

in population

a 1.74

effects

populatlon-lnduced

in population

expansion

public

.189

induced

a 6.7

induce

Irrigation, and

that

expansion

that

u__

is clear

increase

in structure

changes

output.

resources.

An

A 10 percent

structural

It

important.

_-

population

elasticities.

effects

effects.

these

_

Demand

in

structure

cultivated,

require

real

are


28

This ment

line

of

l_cogrmm_ng

developing,

research because

countries

mechanism

have

_elevant

indicates

a highly

administered

ruxal

that

develop-

governments

structured

choice

in displacement

of of

they will Pursue.

new type of rural

than in a net increment

aid may acoompllsh

to

which programs

aid to support a

ment effort may result

develop-

of existing

to activities.

little of its objectives

programs

In fact,

if it is not

in such a way as to not cause substantial

displace_-ent. section

it

for determining

Consequently,

rather

is

This issue will be considered

regarding

The estimates

investment

in Table

in research

in the next

and extension.

4 will _so be utilized in the fifth

•section of the paper to illustrate

developments

in policy

modelling. 4.

Research, Extension, Productivity Change Agricultural

production

of production,

land,

etc. are used;

and

productivity

Rural Development

grows when:

irrigation

(b} output

increases.

water,

Projects

(a) more factors

labor,

growth

through

low-cost.

However,

cultivable

land, they must

_ertillzer,

per unit of aggregate

If land is relatively

production

factor expansion

as countries

exhaust

turn to more

growth, particularly

to irrigation

now a large economic

literature

and

factor

abundant,

may be relatively •

their stocks of costly

investment.

that concludes

forms of There is that product-


29

'ivity

enhancing

of.qrowth. ,a• high With

Investment

pay

studies

showing

,i_S , "however,

-_e_elop_emt •ment

i_'_rese,a,cch has

_off. _ill ...... The evidence

! some

There

con _"' ...._1,tute " a low-cost

activities

v_ry

high

been

sho_n_ toe,have

for extension _ceturr_ and

source

is mf_d

oth'ers_o%

".

I ,__tle evidenc, e_ that ru,_a_ -,',

pro ject s such, a_ the

Program. have_ very

much

:_n_eg:_:'ate_ _,_r_i ,D_'V_lop-

of'a' i_>ay-,offLi.:_ #_4_m_,--__',,'

",!p_oduct ivity.

Table

6 sun_arizes

researc-__;.and

extension,

investment

,',

>,

by

subregion

The

measure

of

farm

The

used

foz

is re,_.a..cn .,._._r_; l, nt.en_ity, to

T.he value

[

.i_e,,

table

to one s

,

1959

shows

that

percent

,

(also

_a Africa

and

rggion,

refer

to Table

much

pattern are

product

.,

are

in North in

oceania

agricultural Europe

1980.

the

ratio

of: agricul, z.ural product

research

zan_e

reflect

_y._.1980, this Japan

and

at

level.

,.%,.15 percent

..,

_.959, 1970

_u_tenslui_evarY _

....

group

, ,

close

in:

Country

expenditures

the

...

and

,

_ot

spending

excluding,

_,the,½ percent

East

_e,cica/Oc¢-_ania

SOLl'kiV,_a_t

. ,,-,

,

....

2) ....The h_gher

been

altered

research.

more,tha*_

.I0

America

Of

researchers.

substantially. .than 2 perqentl of

Northern •

agd

_ 5 ?ercent..

Asia,, .had by. 1980

,of ,produc_. level

the

spending

of p_'ices

spendi,nq, more on

to

Central

i'.'_i,._ a/Id .,

higher, costs bad

from

[i_:

moved

central The, Asian

close,..to..


3O

i

'

'.' ,

t

..

- -

,..,,,uA_.zn E,_r_p¢.

,,>,_

:; _.._Y

.,;'i' '

,,

s.

_'_r'ate $o_c_ -T_c_.cai South

B_th W_

,

"

:'

.

'

_;o_t:l_ A._La _o_r_h_ast A:¢_ _'_,s_ _fa "•

.

'

'. :;

.

_

.,

'

'

:_.::. -....

. : .

:L_':_-.Z;,_c om_" O_e.t u#_. _± d_ !.'_:-i_.¢c_ l_Ve_top J_g •

;:._-:_:'_{--_._,usLra_,x

.

].,_e_l.

,Z:.'_:_r_t r i_ ].iz ed ,..... _";_w_:.',e_: "_t._.:.%_o:;._c! - _xcs.ud_g ChOrea 21)_,z::e;E'_'enson_.: J_u_i; _d

..

-!. _o_:

1, tO

,_._' .i¢_ _69

,1_ ::,12_ 2.0i

C....

,.'.... .2g

. .

.._._"_'

,_

_$ .3_ _5

1,37 -73 ;..75

.!_0

_'"

'

. _.

:

.

.=4_ ='_ .2 • 4_:

1.71 1,2_

. ...

] ;2 :_!:"' :';i'1i:,%_

_ .:.._,.,,'"

,£.,% .... ,27 .2._ ._7

P/oyce,I,_,_3,

.,_!: ,35

,,.5 O! ,;,.l., 2_' 2.__I. "_,,,,,:_., ..... -_:: ':,.--_ ;-' 1.24

..

"

, .

.

. $? ':'I.....

,:>,.,; .... ._ ,,37 ;_.i

_

19_':,:i.

"

_

Z_

29 ..... .if.

_ ....

......

, ._._e___.,_a

-_-"_ _ .7,'_,_ : .

,

,_.. ..... a ..... _"

Afr;L:_ A_x-:L_

'

• ' ,.6J

¢7_

_,: ; 67

::i',2_:'I';:I ' ' .19 ,

.

.._

. _6

,23

"

,62'

. _.."

.

,5_! :.20 i .43 ' ,81 ,60 1.Ol •,,#; "_._ _; :12_ .51 ?..5_ " ,38 ,5'7 .66_. -:,. ,,,:,,_,,,. ,73: ,29 ,33

.44 .92 .59 .62 .._6


32

me_t.spendin_ ,

o_her..than

probaDiy

than

nO.re

oa

research ,.

_ perc.,_%_

of

exeens_on

and

,

:

' .

is

" . . .

ag_ioulr_ra_.."GDP:

_or: _.m_ny .

countries,,"

A and

re_ent

extens._on

have

study

Of

.shows

that

.respond_d.._o

ment

_0 '_pirOd_iOnOf

by: n_tlo_ai

.the"

% _ [ cen_moal_£_S

",. .tha_.': aZe-_t.rad_d

to

'O .,,andexten_i.n, ,.,

high

x-esearc"n

in

developin_

iitators MoSt

One

of

of

spend,inq

_he

on

r_quire<_ostly are

This

is

is

.and staffing

"_0 ___-_'ai.

given in

cour_trie_

rural,

!a_ge

re_,s_n_

for relative

t,ha_..t-e_ear_h.. tzaining

in.

expe, ns.i._..,reia_ive. a

£actO_.:'_nSa_eged ,. " . . :_ff_C[[ _-

devel_p_nt

develo_ment

have

,

andeztak,ing

extension

is

thus, .alsD •

on.

,,.[. , ,!.,_,..

scarce

. :_2hey

p_opor-

_ark_._. of

,.

countrie_

an_

-

under.taken

n_i_];ative,costs

develop_n,q

emphasis

developing

_n_ __.St .,-

_than

.in &_rnationai

,.

levels

countrieS.,

high

._

reS,pomded

,les_..

_esea/ch..%s

work.

e.x_enslon-workers_ •

when

.in general

govern:_-_nts,

s_ien.t_iSkS-are

tO

to, the

_espond

re,!a_ively

research

£n..i.d_._ter_ng

,CO_T_odity ,, thigh

,MOre ._p_.n,,ii_g on

countries

forces

tionateiy.

research

feZ.

.,and-, ,_:,xtenslo_._....C_modity_oriente_:.

.fn_es_.men_.

Countries

patterns

developing

ecor,.omic

l,i_ re_,earch

research

_nvestme.nt

_pr0jec%s-

numbers

'

of 'po_entiai

i

._ field

s_aff

who

can

De

,_iven

-_" "' ' c at _,._.a:i[_in_

ic_

Co'st. '

Hence,

• "_" ..

many low

rural •level

deve!oDment field

._taff_,

progz'_'_s

a_e

highl@.l_tensive

in


33

The s_end

_tudy

more,

Cerlte:¢

_he

(IARC)

positively created

by

more

the

t_e

the

was

research

of

variables

inc].uding

on

Table

of

of

the

7.

IARC

and

India

of

Indian of

£npu_'_s and

Ou_put

adop_ive

and

the

impact and

They

_esearch

respond research

IARC.

in

talcclarions

output,

foz

I programs

Agricu.ltu_ai

colmuodity.

D_th

the

HYVs

research

Zr_ternational

demonstrated

? provides

national

opportunities

e_timates

variab,_tes

that

on. the

productivity

investment reported

:found

spends

to

The

Table

also

national _tudy,.

several research

the

research

impact

Table

s_r_ct_ in_est_ms_t. of

_hese'

productivity.

Productivity,

Output

v_:iable

EffecSS

Var_%ble

Factor

_lec_rif ic_tion

,03357

.... .00,q59

.02450

Irrigation

.58752

_,_34,/

35275

Ne_ _._ •Farm

_itmlsity Area.

Size

,_I0'71 .26243

- - .0443S

.65509

- o16189

.22232 ,!, ,

HYVs

.04796

Ix_dian Besear_'d%

.04929

-

.02265

.02531

,0203'7

.06966 ,i

Source:

Cc_uted

from Tables

lZ

2 and 4.

• ,,..


-34

'

.[

,

.

app_xim_ely,

.

t_e, ._,_.:.as _he',. irr._a,Zion

_t_e_ity

_?hi_-:, .imp_e,S .t_,a_..an.ex,oanS.iono_._rzi_'atea ,_..

e_feCt

' ,

._effe_.

•l,a_a has _an

..

of"a_;,.

'o_'".!p_u=_i_,.'ap.9_.oMimate_y'/'>.i_wice £_,

"

"

,_s: _,,analys_m -:,., imp_-ies, _.l,a_.qe:'.:e_u_n¢..._o ._n:¢ast_• i'•ve.,--y . _J:°"_ , • ' _'_I',_ ..... _i . . .._ _" _ . . :,' ,. _" i'.:_:,'"

, .,.

:_',_ntin I_dienre_arch. ,,

variable

_n .[_ ..

suppos_

...

,-

In the,,,a_sence

t._i,sa_,!_si_, . .

i_a_:' ta@

.' • .,,.•

it

Of'-an extension

i_ "_,_obabiy _easonabie.

_o

,

r4_s®arqh

'!,

peroen_

,•

va_iab_:_i_

,

=ett._gg :both;.a

.

_.f "%he.vai_e_ of

_,.'.

•pz'_d1_.C_:_,_the"

agricul._u_al

•,

, . .,,,_

.

,,,;

.,

. .

,

, > ,'.":.::,,," ,

",

" _1_:

"

i.x,"

of outp_t:,.g_eraues-a to

O_7.,,-_e_t-

an

_er_l

•stream of,.n_

sff:-0utpu_ after

_ate-_g

:_etu-_:nto

_. ,

• . ,

_ut_u._._,_/_in_-,"

,.,,

yea=_,;,_ Th_s."_.mpl,_s

t/i_.S,£!i_tvest_e_i?,ii-_,g ,r7..2-percent.


In Scone

spite

f_r

nology

of

the

pro_uct;Lvlty

suited

_o

conditions

many

develo_nent

•rural

'the "technology of

i_

_!n'_mber of

_ains

the

a_.%d soc_al

becat_se

large

in

region's

re_'ions

low),

projects

available"

but

new

the

tea_%-_-..

and.[•ecOnomic.

one

iDased

..showZng

<whe=e

geo-climate

is very

_ocio-econo,ni.c

studies

_

still

:obSer.v_S:

the

•idea. tha-_ ,_

on

.is not

!

being

f_,_%ctors. .Al_most

.u_i.liz_d

SIch

all

:-_

_: [ ; _,. !.

project_

fail

to

etimuiate

_ignificant

produotiv_t_

__h

i I

and_

to

_.he ex-teni: thez

short-run.

Such

potenuial

'they do

i_rojects

"_sually

.foe productivity

in

the

long

J._-._the quickiy

growth.

_n_._, thez'e

9rowtb

iS

I

exhaust

very the..:_

1__2./

simply

is

no

substi_.t_:::Eo_.i_ i

the

development,

environmenz growth. it

is

of

in If

not

Actualig_

a

new

teehnology

9_o6.u<;ing _egion

going many

to

suS.ted, 'co "the

k_ro'_Uct.ivity

does

.no-_ pur_e

_:eaiiz_..broad

recent

rural

and

.real .i__"

a technology

real

,,:

lo_ai_ ......

,;

:L_,eome _roWth_:

devel, oN_ent

projects

._y,. , •

,

_:

.ithat._,_ '1

' :.

have

been

evaluated

ehow

that

they

nave

had

a •ne_

IO_

I

of

productivity

prices

away

gains. from

9roductivity

In,tez'venti0ns'ir:

equilibrating

losses.

efficie_icy

Subsidies.,

for

:_ar_etS

it_ _.,i

p_:ices,!_ause example,,,

,

to:i.rura.i I,

credi.t

markets

unless

they

market

failures

e lead

to

productivity

losses.

Yet

a_-e correczi.ng ineffic_.ent _hese

use

program,_

for of are

pre-e:_._t,ing

capital.and genera.)_l_


"

" ._

:.

,

,.

: '-_ 'L-_.....

' ....

" ;

': "

'

'

"

i_ __

.._ ,_..,_

:i,b. i ' ':-.,,IS!<,,"_,_ , ;"

' . ;:i_:.._'_0.".' i:

... :,

• '

. .

.:

'..

. !_.

..

.

"

.......

".

"

::.

_, 't".'.'

"_,'.;: ."

"

':

._

......

'. '_ "

-

' _; _t:_,V

'

" •

'

• '

:

"

"

'*

:.

..

"

- -

....

!

"

" •

--

[ '[':._

-

,.

' ?"

'

t_' _q'"_ . _:._:_:: .....

'";,',

'i .

'.-S_.

t _:-_'_-'.7,:_ '. _"

".'

ff

• '_o xe_e

.

:':.t'

.

..

:, :_ _,:-

,

2." . ..

.

.

_,"_,,_"_,_ -_u_

_:_.'_:,_

ddr_

_

l_n_

_

_

_

_

l

.

. _,_.:.

_

.

"_,_O_T_'_,-.,_q.. _,_'_f_._!._._:_I ,_._,.,,._., _, et[:; ._.... _'_

•, •

_

_

"_

:'_"

a

. .

_

0_

_'_g_,

.

5_

_.,_'_

._tl_

. .

_'_'_

,[.,,,

_"

_

_

• .

l_'O_

_

_

_

8_"


39

labor A

_hu:_.; Deccme_<

reducticn

can

Lhus

a shif_e_c

:.n pop_ia_;ion

have

rllraJ.-_ m_n

an

effect

in _h_-,_u;'£,ml. laOor,l_..met._,..r: _-

qcowth

fm_Xli_s L rural, fa_.ii:_es through

_n

'_,_igrai:_..o'n.

Tn,_ _,,.E._.._._.._ a:i._eoZ the closely

a:':_ong_rban

related

Zo

the

an_.mal, power, ma'_ket

__p_',i,vO_

feed

is

-- _ i

aS a val'_'_ewe,.._ .......9..ggze¢_eteof

_ge

cr,o'p_s'_ipp_2, i ,i

estimates

o_

Evenson,,

_1982},

F_r_.:&iizer and gza_,to_ '

= '," _"_' _,.ia..,t_<,It.ie£ are

_et

e'_ 4.,0

,]..

-'=s_"_"+l_:ti_telc_-'

nat iona I _i.,.,d,_ oD0o_'tunities:

.......:-, marke_:s

.i_],o_,..., one _o

:nu_f_er of in each to

shifter_

_a=ke.c,

xaoo,_,and

payme_,_ts zo a residual

on

,_.,_2_ulau_, the

R,<_i:al, zncomes

are

in rural

aa

a laz_.

, ,

by pa_men_

b_alioe,N_; le_

(in this

incomes

[" i!

Nuangi_ieg!.

_owei-..facto_,

_o ffixed res_)urce_

c:r_:ges

of

detemmined

such

ipu:fch_se_ chei_,ic,._2 and

Con_equenely,

effect_

equJ.libs2u_r, :grlces and

oc;ner ,ow_ted facgors

ren_

..... "

pi'aff. ;

can

case;, ,}_;an_) be

inf,_r_e_.. 'I

from

changes,

in p,rices .and quantitie_

markets

aepicted,

changes_

a pr±ce

_;_._nermore, _ef]atoi"

can

by be

_n

,._e

adja_rln_

con_:tructed

ior":p_ice to

convert 'I

nominal

.income cnanqes

'_o real

income

, _"

change_.


40

_•_•_.:._••i•and_es, _.and n,,_a,_" •landless-rural •. ..... ias_. th:ar_one

acze

of-:Operated

i_c,_seho_d•swi.th land,

_;.). :o;:.._._i_ .f.arn',acs. %-xth z _';e.,. :.=o15 a<_Z,e,s.-.or.'_' operated • ._ .. ,_,

....

:........ ,e_.s'_";,:h moxe .lar_d,,and.

.Zl%.aa. 15 acr@._ ef

•'

,.

,

operated ......

2(:>_each"_j,.,,u._._ .,_n.,-. '-'_.',.t_, p" :'.... "..-u,,w..._.g_.t..=,_ • _,"._.and l,'%_o_.se Welghts ..._..._ • ..: ,,._n_x,a.pt,_._, weights

Showinq

were

t_%#..:...sbar_s of _he

fo,;..r a_=icu!.ca:ua3..",;.roducu_=<a._.di%<>n-a,_ric_t_rai, producZs -

in

.

[ ,.

the typical ..• _.......... """"...... _ ".n baske%:_ . ..,.were ....... _,_,,..._

we:tghcs " _

based

on. the

sha:_e_ of. income

ar,i_z_.lpov;.e_:,land

in. each

group _s inoone

w_th-this

zent

were

;_nformaUion,.

and

also

cuan_!.ti_$

zeal

fox

capita

.fro_,agr,tcui.tural

....... _ ...... n.on-a_.:l_± _ur al

Gon_p_ted,.

labor

i..

iv.,-'.........

,_,_anoes _n _q_illibrium

i.nco.m.eper

,om_e._ ..... ' *. "',. Inco_le

in tL,e ei,_'h_.markets

13/ _.a_.h.Of "=he fJ.ve...g'roups. _""' .:


, :.,

.

.,

na_=_"e_.

,,

'.

'

'._ .

.

•_P,a¢,

"i.;',/ ,

:[&VOZ" the

,:

'

,...

.

_:6:!a _, ,.an. _.. .x_c_ea_.':,_...,.::

i_V¢-_4}_,_$ ,

,.

.,

.,..

pOp_ia.._or,. _ _... =;.,,. ];,OOC,, _ ,,The'i ,_ ,

" 0

" •

'.

,'1 .

'

t;h.= _.".

,

41.Y*,-

,

,,

',i,:,',

,

,.,.,

.

', . ..4 ,o ":,:!'

,_"_:":, _......

: ,

.

•!

'

.

,

5"" . :"....

,,

'

"

,.

,

_...

._J;,_.',

' ,. .

'

• 4' ''

.;'

"

.-mce_pre_:;it .::*.s a..red.tc-_::..on ,.n;_;_ e ..popul, ,_ _,._,_'tO

.,_. IaDD'.." ::ecru_smen,t-proWram

"[

:

.

'.

ua: ga:at.eza.

?.

,

,

_

.

#o'ar._r_es,.

Colaran _ si"_c,w:

,.

wo_rke_: _ap,

,

__'_has

a Za:c._eaad

,

p,:.'-'o,_-e., ,_.;,.s.',

[

_,; i!•

ce&i

:incc_,_eS,'?he

landless

agciicui_uz:_i

.:3'&_ s .:_,0£-_ fr,.Tx_, this .specia'tize,_ effe_?t __ , ..

_ae_

.. , .

.,.get_eral • ,i"

%

.: i

,oopalat:i¢._

--o_ .... _"-'

(Ac_u_

t

wo=_,e=s _,},_ere, r#e,ruiged

_hSi{, ,f,_am±,l_¢s .are '1

_'ea_

:W;_9,e,_ wo_la

•.:: ,

: • ),.: ,.,

r_se

:even

mo't:c ,.)ii: ..... "-!.::'

-


46

mot._,._a.t_., d._by an. interest beh_vior_ by

in und_-rs_tanding .e_..0mic

â&#x20AC;˘although. a .number

an interest

in

of

st_.dies .h_ve.been. motivated

s.p._uific program.._pact.

die...mot.:.art era. pt ..at_.,_ore direct number

of

eva.l,a,t_n

>studies

::.:..This. _author

._ev!ew of_,_,h_._.:gr.owing

._._.

S.uch:_eval_a_ion

studies have generally utilized the methodological frame.,'.. .:..,' -<"i . . , , . ' ,,, :,, !.,,_,-/.,,. i-_. _ Themr are work dis_n_ssed in this paper. .....conclusions broadly

uonsistent

economic nu_r as

I)

effects.

_ of

wail

issues

a,"many

with

thOse

referred

to _re

"'They

have,

however,

identi'gieda

regarding broader

project

soaial

design

and

'indicatorS.

,.,. _.As_c_i_usio.n,.

the

fo!lowix_g

c.Man_ _peclfl¢

r_ral

deve!o_t

as "_egards

managem_mt

"_

":":_ '

generaliza_onsare

projact_.With

short-

temp.., obj e_._ive s _._continue ._oi, be _Poori_:;,.__ed. Short term

term

objectives.

trained

and

theless, The

objectives.are

nature

Field

ill-suited

some of

slow the

_i_en..__pr_zri_y_:._, staff to

often

poorly

tlhe":'_askat::hand, _ None-

improv_tS response

are

long

have

been

of".househoi_s

_'__ _ :'" effects : '_"" _s "better to program

_de. _and_fazms

underSt0od:t_ay.


47

rall

structure

of development

roved

markedly.

o the

rural

n

MOre

sector

Markets,

roads

ndation

for

id

in

are

being

schooling

develop-

improved.

most

have

":

growth

term

many

g

and long

been

countries,

has

been

future.

n

in

massive.

These

In

s

been

the

ent

projects

y

the

that

country

and

goals

ratesand

dence

most

important

not

This the

accomplished

at

primary implicative

as

wideS_reaa'

_!s

investmentWi1!1

character

of

_

_Ural

years.

ough

look

fact

in technolo_'pr_uction

schooling.

future

The

universal

although

change

. i :,;L' , ,:i

impacts.

has

Investment

certainly

s

near

achieved

impressive

nt

term

has

countries. ...

ort

_<

countr_e6.

economic

perhaps,

_._'_'

is being

to institutional

long-term

in many,

nts

attention

in most

is beinggiven

programming

set

in rural

have

in virtually not

progress

have

improvements.

been

widespread increase

in the

world also

development,

met.

decline in

al_

life

rural

One

in infant expectancy

hasbeen

made.

has

progress

made

experienced

needs

more

Virtually on

this

ge_%eEal


_m_lcloz_Aep

• _:_soo _,u_m_sn.Cp_ eIq_:_dgooe _,_TqO_

,_m_l

.s_soo

q_T _

o:F S_TOTTod UT 9OTOA _ _A_

k_.oe]r]r__[T:_o_)xTP oido_d

_r_4o _

_qo,

-_u_lo_A_p

e_eqo,,pTO^e

Qq_ _oTT_

e_._ _'-. •

e_u_qo

o_ 1_:ZTrLlb_

_aOU_T o_ puo_ PTO_

o:; a[_ ,_uo

..,SUOT._duooo

UOT_e_ndoc_ _

pu_

,.;_ _,_:!._ ',_.ir

,

_

,_'_", ;_

uT UOT:;OU3;'_= _e

oo_ e_

.

_.ST_OUOO_

oo, ST ,_I_T_ -p_:_:_uuoou_ , ,_

u_ s_oo e:z_ spooE_

_

e_e_l_T_

_Iclo_d

-s_oo

s_u. _omp _UeOT_TU_T s L_Oti_T_

. ,_

•UOT_e_ucl_

_ _ :i_,_

_:_t_

u_.z__o_

_'__......:"_:__

'

uo,',_, 'e_o_._:_:,_._ ' _:i_ _


49 _. ,

7)

Economists

have

development

as

sociology.

Sociologists

_'program The

and

not have

project

contribution

Seen

as

other

"close"

have

interpre_ati0n

economic

relationshipS.

_

partlt_1_ar_y_

been _more

and at

of economists

of

rural1 '

disciplines,

design

in terms

to

data

have

aae_ÂŁ

_o'lle-cÂŁion.

lar_ely

measurement

The _general

however,

of

_evelo_nt

a significant

_ _and economists future.

rural

to learn

s=ope from

ProjeStS, for each

both

_n _"_ertain

con¢iU_

is that coo.omit Stu:a_es hay, cOnt_ibut,d consistency

_at

t_"_e "iT_re

s@ciO_i@tS

other_ in;_eil

is,


_ApPENDIX_ I PROFITS

FUNCTION

METHODOLOGY

Suppose farmers can produce three possible crops, CI. C2 , and C 3 , •_i:u_simqthr_e_':',v_a_'iable ,fa_or,s ..:Vl, F_ ,/_and'LVa on a given _ixed amount, :of•_Iand_•_ , " and- wi£h .given te_hmical and infrastructural envlronmemtS, T and I One! , Can characterize

tbei, {1)

p=odu_ti0:, po_stb_:ities •

(.C!_, C_.., Cs.,

_, Th_s_ _Say IC_ )

_fmnct£o. foE_:any

Farmers

then

L'

by aOt=ans_o=a_O,) _u.ctio.(1).

V,_., Tt_., _'3_ I,,

_,

=

0

stmp-_,shows _e_su_i_ma l_eOdaCt level.lof p_duo¢:]on;_of othe_-_,_Ps

seek to-maximize

vaEiable.p_fi_s

o

_her_..,:P_ .i_.. • ._. ............

I)

..

ete_ aloe prices tha; :_ i_; ;,,.:_;: ,... .... , , :,,

,of_one a__

crop i of

(_)_,_ .

_.:..

_:: ;:';......-._.,:,..i _

[such as labor and fer_ili*e_} tha£':_imizes_!{_} ,_m_',-_'(1). _his maximization activity leads to ".optimal" levels ofC 1 , Cz C_ , _i Fz .and _': that can be expressed as _unctionm of the prices faz_ers face and the fixed environments that they must work and live in. Thus maximized profits, _.T*e_can be expressed as funct:ions of p.rooess and •fixed eAvironments. (Fizst order conditions for maximising (2) subject to (i)can be substituted into (2) to yield (3).

Expression (3) is known as the "profits • f_nctlon" and it is said to be a "dual" solution to the transformation function (i). This functio_ is important because we can derive from it a supply function .fqr ,each crop and a demand function for each variable factor. This is done by. applying the Shephard-Hotelling lemma whlch says that the partial derivative of (3) with respect to each output price produces the supply function for that output.

= c, = c,(Pc . Pc,"Pc,"

. Pv .z,v , .

,z

/over


'--7' ,'!_

A-2

i_,/n_,v, = _ = r,,,cPc,"Pc::Pc,,P,,,,, P,,-,,Pv,"L, T,,_"_ _ "

'

: "

-

:

+

,

_ "" ',

._,.

' i ,_

'

_<:i,,

,,!.,

,<

I,n this. way._ a ."system" of equations (six in, thi:S.:_ase) is de_,.Ved, Each. is a functio. ,of,, all pEIce$ alld _?_._:iXed environments. These in turn are all exogenous to_ _he fo_:,_i.'e., beyond the control of the farm. Taken together they Joinfly determine C1 thru V_ . _ _ .i ,.'."'". Estimation of.a system such as (I i ) with farm leill data_ .. allows _omputati.on of .many â&#x20AC;˘effects of "interest. .:_or!:exa_plei,:,,,.one can. compute, the effect of an _ increase in a price ,(sey ,,P_.,} not only on its,own supply (Ci) but on the supply Of,G2an_ C_ and on the'. demand for VI, V2 and _ as well. ..Ifrth_!.,,__Ogy environment, can be characterize_, say by a 'rese&Ech stocks _=re, One can th_ncal.culate;the e_fect of a ch_ge.!._!_.'research _nvesmeci_s, on all six equati, O_S in (4). _ .........


,THZ HOUSEHOLD ,MODEL

• ,

moderno.ehol d

of •.

One begins in this case defined oveZ:_hq_sehol@ gOOds

(5)

_,

-

v" =

with

_ _ h I_ _ _

• _ •

a household

'_,

utility

_'_ .._-k' .<,_

:__[on

u(z , z ...., .,,

Th!_: ;ft_nCti(_,Sim_y

relates

levels

of

utilit_r

_s

satisfaction

to

indeed:: _t _i_Y_ _i_pdSsii_le to _:%_l_n_[e-_the_",,:_ca_ ei_i_,late pezsonal_: goods S_t_ as h_alth' t[_l l_i_u_,,_'_.._c=_=___-t_he_ idO noK_:hav@ ]_:_C_, i They do however have ."shadc_w prices" oz4cost

.

,._e

'

hg_ehol_

.

.

produces

..... _ ;

_i " _._

these

• ' '_

goods

'.; ....

(Z¢)

.......

using

_he

time

of

:_.:.'..:_:

If the household is a rural farming household)_t Wili' also be produclin_o,,fa_m_ 90ods..as depicted ,_n equations (1) - (4) in the previous _ect'ion. : _he h_usehold _" model -",!._po_tul_a_es _ it produces ho_e goods, Z4 , in the same way t_at it produces farm products. For any level of production of either Z_ goods in the home or f_,_ _odS_ _ _, it will a_te_p_ t_. px.oduce at minimum cost. Having done this, it then .knows the s_adow p_ice Or Cost of producing _,p added unit of child health, child ,services or other goods. ' _fi_ese shadow p_i_'es then _ui_ ,itS._:ch_l_e-of household goods Z{ . The household activity subject constraint of _ts

must undertake to constraints. members.

this produc.ti_n and consumption One constraint is the time

The fixed total time of any famil_ member,.T 5 , is the sum o_ time _pe_%t..off.home production, T_, •working for w_ges, _m • work,ng on crop production To and leisure. In addition,

there

is a monetary

constraint


which says that money income ÂŁrom new wage sources : 7 t, met. farm profits_ TT e , and wage income must equal spending :.or ma,zket purchased goods, Equation {8)..is thus the standar.d.ldefi_ltion, of income (and G_P ). However, by substituting (7) _nto ,_(_Si_!_ _an obtain an expanded definition Of income generally _ c_"_ll


REFERENCES

Arndt,

T.,

D.

Dalrymple

and

V.W.

Ruttan,

(eds.)

Resource

••Allocation and Productiyity i n National and International • A_ricultural Research, University of Minnesota Press_-'---• Minneanapolis, 1977. Asian

Development •Rival Asia:

Bank, Asi_nnAgricultural Challenge and Opportunity,

Survey_.19_6__ Manila, April,

1977.

Binswanger, Hans P., The Use of Duality Between Production, Profit and Cost Fun_c£ions in Appl_ied Econometric Research, Economics Department, International Crops Research Institute for the Semi-Arid Tropics, Occasional Paper No. 10, 1975. Boserup, Ester, Unwin, /965.

"

of

AgriculturalGrowth,

Allenand ,.

, P_u!ation Press, 1981

Chicago "

The:Conditions _ and

Technical "

:

Change, _

University ,.

'

.:

of

...

Braverman, Avishay and •T.N. Srinivasan, "Agrarian Reforms Developing Rural Economics Characterized by Interlinked Credit and Tenancy Markets" in Hans P. Binswanger and

in Mark

R. Rosenzweig (eds.), Contractual Arrangements,__ent and Wages in Rural Labor Marke£s_in Asia, Yale Unlverslty Press, New Haven, Connecticut, 1984. Chayanov, A., 1966. Dhar,

Theory

of

Peasant

Economy,

Sanjay, "An Analysis of Internal Ph.D. Dissertation, Yale University,

Diewert, W.E., Functions,"

"Functional Journal

of

Forms for Economic

R.O.

Migration 1980.

Profit Theory,

Irwinu,

in

Post

, "The Green Assessment, "

Wheat and 1309-1329.

and Y. Maize,"

India",

and Transformation 6 (1973): 284-316.

Bvenson,PaperR.E., : Technical and Factor Markets presented at _the Access Agriculturai Development shop on Technology and Factor Markets, Singapore, I0, 1976.

Ex

Illinois,

in Agricultu{e council WorkAugust 9 and

Revolution in North Indian Agriculture: Yale University, mimeo, 1982

Kislev, Journal

"Research of Political

, M. Ann Judd, and James K. Agricultural Supply," Yale University, Center Discussion Paper 442, 1983.

and Productivity Economl, 81

in (1973):

Boyce, "Investing Economic Growth

in


..

..

••7 •• . • •

Johnston, B. Hopkins

•_•

and J. Clark, Rural University, 1983.

Development

Strategy,

Johns .

•Krishna, Ray,• Unemplo_nnent Council Reprint Series, Lau,

L.J., Some No. 86A and Encina 1969.

Hall,

in India, 1975.

Agricultural

Applications of Profit 86B, Research Center Stanford

University,

:Sidhu,

Memorandum Growth_ 443',

A Strategy for Cornel l University

Distribution Of Agrieu_ural A Model,, _

S.S., "Relative Efficiency in wheat Production Indian Punjab," American Economic Review, 64 1974): 242-250 ....

Strauss, John, I. Singh Models: Extensions, Bank; 198.4) Yotopoulos,

P.A.

Efficiency," 214-223.

and

in the (September

and L. Squire, Agricultural Household Application and Policy (mimeo.:Worid " ... : .,

Larry

American

..

California,

Me!!or, John W., '!The New Economics of/GrDwth: India and the Developing World,"Ithaca, Press, 1976. Ouizon, J.B. and H.P Binswager, "The incomes in North Indian Agriculture The World Bank, mimeo, 1982.

Development

Functions, in Economic Stanford,

T.

Lau,

Economic

"A

Test

Review,

of 53

Relative (March

Economic 1973): • .

,

_ -


FOOTNOTES

l/

See Johnston and Clark, development experience. as severe as many other field as a "mess" with scientific foundation. Evenson,

1982, for a review of rural Johnston and Clark, while critics, nonetheless regard little in the way of a solid

not the

2/

See

_/

See an issue of the works on this topic

_/

See Evenson, Malnutrition October 26,

_/

See

Evenson,

Popkin

6/

see

Schultz,

1984,

_/

See Roumassett, Binswanger.

8/

Strauss, Singh literature.

9/

See

iO/

Op

II/

See V.W. Ruttan, Agricultural of Minnesota Press, 1983.

12/

There are many reasons for this. Scientists would like to avoid responsibility for failure to produce technology and hence blame markets and stupid farmers for lack of adoption. Bureaucrats and politics have a short time horizon and do not wait for the long term investments in research. They also have mixed objectives for productivity which disables many programs that could otherwise achieve productivity gains.

13/

The model includes non-agricultural goods implicitly. Their price seems as a numerous price. The system is first Solved for equilibrium prices andquantities. This equilibrium can be expressed in the rate of change (i.e., all equations with respect to time are differentiated) as a system of eight equations.

Evenson,

i982. Philippine Economic in the Philippines.

"Poverty, Fertility, in Panama", Economic 1984. and for

a

Mortality Center,

early

and

discussion. and

Squire,

Roumassett

Infant Growth

for

Quizon째

Braverman

and

Journal

and

Srinivason,

1984,

provide

Rosengwing

a

summary

and

of

this

Martin.

cit. Research

Policy,

University


F-2 This

equation

GU*

=

system.can

be

expressed

as

K*

"a matrix U* a "vector .where. G in of elasticities, Of equilibrium rates of changes in exogenous variables (prices and quantities) and K*a vector of shifter type variables. The effects of shifters:on rates of change in endogenous variables can be solved, as:

_

= G-i x_

Rural Development Experience: Economic Perspectives  

of the goals and objectives set forth in the project design This conference is directed toward the broad issues with project objectives_ and...

Read more
Read more
Similar to
Popular now
Just for you