Posted February 1998
| Food and Agriculture Organization of the United Nations | United Nations Capital Development Fund | International Fund for Agricultural Development | German Agency for Technical Cooperation | Swiss Agency for Development and Cooperation | World Bank |
Rome
16-18 December 1997
Technical Consultation on Decentralization
Documentation
THE PURPOSE THIS PAPER is to describe and, as far as possible, explain variations in policies, programs, and institutions that influence agricultural growth, agrarian relations, and rural welfare across developing countries and over time. It also identifies conditions under which policy reforms meant to bring about greater efficiency and equity are likely to be initiated and sustained. In section 1, we briefly describe the key variations in policy, agricultural growth, and rural poverty found across the developing world. In subsequent sections, we explore the following questions:
Why focus specifically on agricultural and agrarian policies?. We examine the material conditions and missing markets that characterize the farm economy in the developing world and show how these influence the agrarian structure and institutional environment within which agricultural production takes place. We hypothesize that the special characteristics of the farm economy also influence a country's social and political environment, and on the political processes that determine key policies. If this hypothesis is correct, it provides a strong justification for focusing specifically on agricultural and agrarian policies.
How do distorted policy patterns affect the efficiency of agricultural production and rural poverty?. We address this second set of background questions by summarizing key conclusions from the literature on the agricultural supply response to various policies, and the resulting impact on productivity growth. We also consider how policy distortions coupled with imperfect and missing markets, and the unequal distribution of wealth act together to reduce efficiency. With these background elements we are able to start addressing the key questions explored in the paper.
What explains the observed differences in policies across countries and over time?. Most of the essay is devoted to investigating this issue. We look beyond agriculture because political decisionmaking involves players from all sectors. We review the literature on political decisionmaking, and the literature on the importance of the institutional and political environment, including approaches based on analyses of class relations. Finally, we try to understand why so many developing countries adopted growth-reducing agricultural and agrarian policies, and why the policies have been so difficult to reform.
What are the conditions and circumstances under which policy reforms are likely to be initiated? Under what conditions would policy changes lead to improvements in efficiency and/or reductions in poverty? And under what conditions are the reforms likely to be sustained in a new political equilibrium?. We attempt to answer these questions and then examine how the factors and theories discussed in this essay can help explain why rapidly growing and industrializing economies, such as those of East Asia, have stopped discriminating against agriculture, instead giving it a high degree of protection.
What elements, regularities, and theoretical insights emerging from the literature reviewed in this essay are most likely to help explain the variations in policies across countries and over time? How can they be used to improve policy advice, and policymaking in developing countries?. We pursue these two questions in the concluding section.
Then, we reflect on the future research agenda and ask how the elements identified in this literature review can be used to build and test an improved political economy of agriculture and agrarian relations.
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