Profits and politics: Coordinating technology adoption in agriculture |
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| Affiliation: | 1. Toulouse School of Economics, Manufacture des Tabacs, 21 allée de Brienne, 31000 Toulouse, France;2. School of Economics, Renmin University of China, Beijing 100872, China;3. School of Banking and Finance, Research Center for Credit Management, University of International Business & Economics, Beijing 100029, China;1. Center for the Study of Law and Society at University of California, Berkeley School of Law, Berkeley, CA, USA;2. University of Wisconsin at Parkside, Kenosha, WI, USA;1. Washington State University, School of Economic Sciences, United States;2. Illinois State University, Department of Economics, United States;1. University of California, San Diego, 9500 Gilman Drive, La Jolla, CA, 92093-0508, United States;2. Princeton University, Princeton, NJ, 08544-1021, United States |
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| Abstract: | This paper examines the political economy of government-led coordination of economic activity in a simple two-sector model in which individuals' choice of agricultural technology affects industrialization. We demonstrate the existence of multiple equilibria; the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization. Relative to the traditional technology, use of the mechanized technology increases output but leaves some population groups worse off. We show that the distributional implications of choosing the mechanized technology restrict the possibility of Pareto-improving coordination by an elected policy-maker, even when we allow for income redistribution. |
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