Market-oriented reforms,globalization and the recent transformation of Latin American innovation systems

Market-oriented structural reforms were implemented in Latin America under the expectation that the transition from an "inward-oriented", "state-led" growth strategy to one which was more "market-led" and "outward-oriented" was going to be rewarded by a sustainable long-term improvement in the region's rate of economic expansion and productivity growth. The competitive discipline imposed by a more open and deregulated economic regime was expected to induce faster innovation and technological modernization efforts from firms and individuals and, thereafter, a gradual but steady "convergence" to world-wide income and productivity standards. A global look at the region's performance throughout the 1980s and 1990s tells us that such a priori expectation was far from realistic. The paper examines why this has been so.     

Economic Liberalization and Productivity Growth: Further Evidence From Bangladesh

The impact of economic liberalization reforms on the productive performances of manufacturing firms remains a contentious issue in the literature. This paper attempts to contribute to the debate by empirically estimating productivity growth of Bangladesh food manufacturing using firm level data before and after reform. Empirical results show that the share of output growth was accounted for by input growth in most sectors of this industry. In some sectors, the estimated rate of total factor productivity (TFP) growth is negligible or even negative. Decomposition of the TFP growth shows that technological progress plays a significant role in TFP growth across firms within the sub-sectors of this industry. Empirical results also show that the relative contribution of capacity realization to TFP growth is not substantial in inhibiting the industry's high and sustained growth. These dismal performances indicate that the industries responded a little to the implementation of economic reforms.     

Foreign Aid: Good for Investment,Bad for Productivity

Abstract

This paper examines the effects of aid on sources of growth: capital accumulation and total factor productivity (TFP) growth; the latter captures the effect on growth after removing the contribution of factor accumulation. Given the role of TFP in explaining cross-country differences in income levels and growth rates, the productivity effect can play a significant role in explaining the impact of aid on growth. Contradictory effects of aid were found: aid boosts investment but adversely affects TFP, suggesting that efficiency losses may undermine the overall effects of aid on growth. It was also found that aid reduces the efficacy of financial institutions in supporting productivity growth, a surprising result that possibly illuminates the nature of aid distribution in receiving countries.     

The impact of capital transfer tax on agriculture a preliminary assessment

Abstract

This paper aims to measure and compare technical efficiencies in the England and Wales dairy sector from stochastic production functions in the immediate post‐quota period. Milk Marketing Board data for a stratified random sample of dairy farms for 1984/85, 1985/86 and 1986/87 are used. The results show that average levels of efficiency have initially fallen and then stabilized over this period. Moreover, there is a high degree of correlation between the rankings of the efficiency measures.     

Technical efficiency relative to a stochastic cost frontier for the England and Wales dairy sector

It has been acknowledged in the literature that productive efficiency in grain production in China has substantially improved in the post-reform period, particularly in the early 1980s. Since then, there have been several policy changes in China, which have affected the growth of the sector. Specifically, the spectacular growth of rural industries has attracted significant physical and human capital from agriculture. It is in this context that Brown's warning of China soon becoming the world's number one importer of grain has raised an important question of whether China has reached its grain production potential. Analysis of the 1994 farm household survey data indicates that the majority of the sample farmers is reasonably technically efficient in grain production but that productivity can be increased further even with the existing technology.     

Institutions and agricultural productivity in Sub-Saharan Africa

Agricultural productivity in 41 Sub-Saharan Africa (SSA) countries from 1960 to 1999 is examined by estimating a semi-nonparametric Fourier production frontier. Over the four decades the estimated rate of productivity change was 0.83% per year, although the average rate from 1985 to 1999 was a strong 1.90% per year. Former UK colonies exhibited significantly higher productivity gains than others, while Liberia and countries that had been colonies of Portugal or Belgium exhibited net reductions in productivity. We measure a significant reduction in productivity during political conflicts and wars, and a significant increase in productivity among those countries with higher levels of political rights and civil liberties.     

Transforming Economic Growth to Human Development in Sub-Saharan Africa: The Role of Elite Political Instability

In the light of the increasing attention on human development (HD) as well as the importance of political instability (PI) in economic performance, this paper examines the role of PI in the transformation of economic growth to HD. It finds that élite PI—the frequency of coups d'état in sub-Saharan Africa—adversely affected the transformation of economic growth to HD, measured as the change in an index of life expectancy and literacy, between 1970 and 1985. Coupled with an additional indirect negative effect on GDP growth, élite PI is found to have engendered a significant adverse impact on HD.     

Green Revolution,Market Regulation and Agricultural Productivity in South India

Abstract

In the first phase of green revolution, the Southern Indian state of Karnataka enjoyed significant growth of productivity of foodgrains but there was stagnation in the second phase (1980-81 to 1989-90).

The regulated markets offered no significant price advantage for foodgrains, nor do they have any impact on productivity. Hence, regulation of more markets cannot play a significant role in ending the stagnation in the foodgrains sector.     

Vacant industrial premises and local development: A survey,analysis and policy assessment of the problem in Stoke‐on‐Trent

Summary

This paper presents the results of some survey work carried out in 1985 and in late 1987 on the subject of vacant industrial premises (VIPs) in the Stoke‐on‐Trent area. The issue of VIPs is briefly discussed at the outset and attention is drawn to the virtual information void that exists as regards the topic. The main core of the paper discusses the results of a survey of VIPs conducted in Stoke‐on‐Trent in 1985 and 1987. A typology of VIPs is suggested and, using a components of change approach, trends in the mid‐1980s are analysed. Detailed consideration is made of individual components ‐ including premises persistently vacant and reoccupations ‐ and several themes are developed. These include questions of the local distribution of VIPs components; the problems of returning premises to use; and the policy issues involved. The survey results reveal that over 3 million ft² of vacant industrial floorspace was available in early 1985 but that the figure had fallen to less than 2 million ft² by late 1987.     

Improvements in pesticide drift reduction technology (DRT) call for improving liability provisions to offer incentives for adoption

BackgroundThe widespread use of pesticides has contributed to increased crop productivity accompanied by problems of releasing toxic substances into the environment. One of the concerns is the release of pesticide spray drift that is carried to off-target properties causing injuries.ObjectivesIn 2016, the EPA released a generic verification protocol for pesticide drift reduction technology (DRT). With this protocol, applicators of pesticides can select verified products and equipment with the assurance that the technology will reduce the risk of spray drift damages, but there are inadequate incentives for its adoption.DiscussionDrift reduction technology can only reduce injuries to people, flora, and fauna if it is adopted by applicators. To address incentives for adoption, an analysis of liability provisions governing spray drift damages suggests that the jurisprudence governing liability might need updating to capture technological benefits. Two proposed legislative provisions are offered that would incorporate DRT into negligence law.ConclusionThrough the amendment of negligence law, liability provisions for pesticide spray drift damages can offer encouragement for applicators to adopt DRT.     

Book reviews

Development and the landowner: Analysis of the British experience. R. Goodchild and R. Munton, George Allen and Unwin, London, 1985. 224 pp., ISBN 0043 33021 5, £22.00

Affordable housing: new policies and the housing and mortgage markets. Kenneth T. Rosen. A Twentieth Century Fund Report, Ballinger Publishing Co., Cambridge, Massachusetts (distributed in UK by Harper & Row). 181 pp., £27.50     

An economic interpretation of structural changes in the bovine population of India

Abstract

A computable general equilibrium model based on a social accounting matrix for Kenya is used to simulate the effects of 10% devaluation, 10% increased investment and 10% agricultural productivity improvement on the macro‐economy and on the real incomes of the poor. For each policy simulation two specifications for the labour markets are adopted, the first assuming unlimited supplies of labour at given nominal wages and the second fixed supplies so that wages are determined endogenously. These affect the results crucially. Under the first assumption, devaluation provides a 10% boost to real gross domestic product (GDP) and has highly favourable effects on agricultural production, exports, the current account deficit, employment and poverty. Under the second assumption, it has a largely inflationary impact, with attenuated effects on real GDP and no effect on the current account deficit. Agricultural productivity improvement is less affected by the different specifications and compares favourably with devaluation except for its smaller impact on GDP. The increased investment policy is found to be inferior on most counts. All three policies decrease poverty, though income distribution remains stable.     

Solving Brazil's land use puzzle: Increasing production and slowing Amazon deforestation

Brazil has become an agricultural powerhouse, producing roughly 30 % of the world’s soy and 15 % of its beef by 2013 – yet historically much of that growth has come at the expense of its native ecosystems. Since 1985, pastures and croplands have replaced nearly 65 Mha of forests and savannas in the legal Amazon. A growing body of work suggests that this paradigm of horizontal expansion of agriculture over ecosystems is outdated and brings negative social and environmental outcomes. Here we propose four strategies that can reduce deforestation, while increasing production and social wellbeing. First, eliminate land grabbing and land speculation through designation of public forests. This would clarify land tenure and limit the pool of land available for uncontrolled expansion of agriculture and ranching. Second, reduce deforestation on private properties by implementing existing mechanisms in Brazil’s Forest Code to facilitate payments for environmental services, with support from market initiatives for sustainable sourcing of agricultural products. Third, incentivize increased productivity on medium and large properties through targeted investments. By stimulating adoption of proven technologies for sustainable intensification, this would help meet Brazil’s production targets and growing international demand for agricultural products, without expanding into new production areas. Finally, foster economic, environmental and social improvements through technical assistance to small farmers. Small farmers occupy a large swath of the Amazon and often lack access to technical assistance, production technology, and markets. Providing quality technical assistance to small farmers could help them better align production practices with local opportunities; increase household income and improve livelihoods; and reduce deforestation pressure. By implementing these four strategies in a coordinated effort between public and private agents, Brazil can show the world how to reduce deforestation while increasing agricultural output, reestablishing its leadership in managing natural resources and mitigating climate change.     

Reconciling rural development and ecological restoration: Strategies and policy recommendations for the Brazilian Atlantic Forest

Increased demand for both agricultural production and forest restoration may lead to increased competition for land in the next decades. Sustainably increasing cattle ranching productivity is a potential solution to reconcile different land uses, while also improving biodiversity conservation and the provision of ecosystem services. If not strategically implemented in integration with complementary policies, sustainable intensification can however result in negative environmental, economic and social effects. We analyzed the potential for sustainable intensification as a solution for a conflict between agricultural expansion and forest restoration in the Paraitinga Watershed at the Brazilian Atlantic Forest, a global biodiversity hotspot. In addition, we provide policy recommendations for sustainable development in the region, based on interviews with producers and local actors. We found that the Paraitinga Watershed has the potential to increase its cattle-ranching productivity and, as a result, relinquish spared land for other uses. This was true even in the most conservative intensification scenario considered (50% of the maximum potential productivity reached), in which 76,702 ha of pastures can be spared for other uses (46% of total pasture area). We found that restoration, apiculture and rural tourism are promising activities to promote sustainable development in the region, thus potentially increasing food production and mitigating competition for land. Our study shows that results from socioeconomic interviews and biophysical modelling of potential productivity increases offer robust insights into practical solutions on how to pursue sustainable development in one of the world’s most threatened biodiversity hotspots.     

Constraints to the sustainability of a ‘systematised’ approach to livestock marketing amongst smallholder cattle producers in South Africa

Commercialization of smallholder agriculture in South Africa is underpinned by reforms to improve livestock off-take in communal areas and engage smallholder farmers with formal markets. To achieve this, Custom Feeding Programmes (CFPs) were established to improve the condition of communal cattle prior to their sale into formal markets and to ‘systematise’ the informal marketing of cattle in communal areas by enabling participants to achieve higher informal market prices. We evaluate the sustainability of eight CFPs located in Eastern Cape Province in terms of their ability to add value to smallholder cattle production and encourage market participation. Communities with CFPs achieved a 16.6% mean cattle off-take rate, substantially higher than in most communal systems. Furthermore, cattle sold through CFPs attained a 17% higher mean selling price than those sold through other marketing channels. However, these benefits were mainly realized by better-off farmers with larger cattle herds and greater ability to transport animals to and from CFPs. More marginalized farmers, particularly women, had low participation. CFPs also face challenges to their sustainability, including inconsistent feed and water supplies, poor infrastructure and high staff turnover. Key to enhancing participation in CFPs, will be improving the way they are supported and embedded within communities.     

Measuring public agricultural research and extension and estimating their impacts on agricultural productivity: new insights from U.S. evidence

This article provides new estimates of the marginal product of public agricultural research and extension on state agricultural productivity for the U.S., using updated data and definitions, and forecasts of future agricultural productivity growth by state. The underlying rationale for a number of important decisions that underlie the data used in cost‐return estimates for public agricultural research and extension are presented. The parameters of the state productivity model are estimated from a panel of contiguous U.S. 48 states from 1970 to 2004. Public research and extension are shown to be substitutes rather than complements. The econometric model of state agricultural TFP predicts growth rates of TFP for two‐thirds of states that is less than the past trend rate. The results and data indicate a real social rate of return to public investments in agricultural research of 67% and to agricultural extension of 100+%. The article concludes with guidance for TFP analyses in other countries.     

Demand Elasticities for Fresh Vegetables in the United States

Abstract

Demand elasticities at retail level for eight major fresh vegetables in the United States were estimated with the Almost Ideal Demand System using annual data over the period 1960-1993. Results show that the demand for fresh vegetables was generally inelastic with respect to changes in own prices, and cross-price effects for most fresh vegetables were negligible. Furthermore, the study suggests demands for carrots, cucumbers, lettuce, peppers, and onions were highly elastic with respect to changes in expenditures on fresh vegetables. However, expenditure elasticities for celery and tomatoes were found to be inelastic, while the expenditure elasticity for cabbages was negative but statistically insignificant.     

Spatial–temporal changes in grain input–output and the driving mechanism in China since 1985

Based on Chinese county-level statistic data, this paper reveals spatial–temporal distribution and changing of grain production, by studying gravity centres of grain input–output regions in China from 1985 to 2009. According to the grain output, per-capita grain consumption, and population, the surplus grain of 2864 counties from 1985 to 2009 was calculated. And the counties with surplus grain value greater than zero and smaller than zero were respectively defined as grain input regions and grain output regions; they were respectively analysed by using the model of grain gravity centre. We found that there are four periods of spatial–temporal changing of gravity centres in grain input regions, and five periods in all output regions. According to the moving path of the gravity centres of input–output regions, 1990 was the turning point of completely entering into ‘grain supply from north to south period’. Spatial–temporal changing of grain-sown area and the arable land was the main driving mechanism for the shift in grain input–output gravity centres. The change of spatial pattern of grain production influenced sustainability of grain production from three impacts. And two policy suggestions are put forward to promote the sustainability of grain production.

HIGHLIGHTS

Use the method of gravity centres to research the spatial–temporal changing of surplus grain from 1985 to 2009 in China.

Analyse the spatial–temporal changing and the driving mechanism of gravity centres of grain input–output from 1985 to 2009 in China.

1990 was identified as the turning point of completely entering into ‘grain supply from north to south period’.

Summarize the impact of the changes of spatial pattern of grain production on the sustainability of grain production and put forward two proposals.     

生产方式的转变对元阳哈尼梯田系统氮磷平衡的影响

目的 研究长时间尺度下生产方式的改变对梯田系统物质流动模式的影响，可为保护哈尼梯田、合理开发利用哈尼地区生态资源、实现哈尼梯田的可持续利用提供科学依据。方法 文章采用人类活动净氮/磷输入模型（NANI/NAPI）对1985—1986年、2009—2020年元阳县两个不同发展时期的NANI和NAPI及其相关构成进行核算。结果 （1）元阳县NANI、NAPI整体呈现先上升后下降的趋势，NANI和NAPI在1985年分别为2 914 kg/（km²·年）和249 kg/（km²·年），到2016年均达到最高值，分别为9 860 kg/（km²·年）和685 kg/（km²·年），随后呈现下降趋势，到2020年分别降至6018 kg/（km²·年）和321 kg/（km²·年）。（2）NANI的4个组成中，食品/饲料净氮输入占20%~45%、沉降氮输入占12%~40%、作物固氮输入占6%~12%、肥料氮输入占5%~52%；NAPI的3个组成中，食品/饲料净磷输入3%~50%、肥料氮输入占32%~57%、非食品磷输入占19%~41%。（3）元阳县NANI/NAPI比值存在明显阶段性变化，1985年和1986年NANI/NAPI比值分别为11.7和11.0，至2018—2020年基本稳定在18.5~18.8左右。（4）从NANI、NAPI与其组成的相关关系看，NANI与食品/饲料氮输入的R²为0.81（P＜0.01），与化肥氮输入的R²为0.81（P＜0.01）；NAPI与食品/饲料磷输入的R²为0.90（P＜0.01），与化肥磷输入的R²为0.59（P＜0.01）。结论 元阳县NAPI与NANI变化趋势呈现高度一致，均为先上升后下降的阶段性变化，与当地生产方式的转变相契合。     

The challenge of building an effective innovation system for catch-up

To date, the concept, measurement and interpretation of total factor productivity (TFP) growth remains highly discussed but poorly understood. This paper attempts to provide a review of these issues. First, the definition of TFP growth and the related concepts of embodied and disembodied technical change are discussed. Second, a brief overview and critique of TFP growth measuring techniques is provided. Third, the debate surrounding the accounting identity underlying the estimation of a production function for TFP growth is highlighted. Fourth, the usefulness of TFP growth is evaluated (and maintained) in the light of the criticisms hurled at this measure. Finally, some direction for future work on TFP growth is suggested.