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_