Distortions to Agriculture and Economic Growth in Sub-Saharan Africa
To what extent has Sub-Saharan Africa's slow economic growth over the past five decades been due to price and trade policies that discouraged production of agricultural relative to non-agricultural tradables? This paper uses a new set of...
Main Authors: | , |
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Language: | English en_US |
Published: |
World Bank, Washington, DC
2013
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/2012/09/16762995/distortions-agriculture-economic-growth-sub-saharan-africa http://hdl.handle.net/10986/12059 |
Summary: | To what extent has Sub-Saharan
Africa's slow economic growth over the past five
decades been due to price and trade policies that
discouraged production of agricultural relative to
non-agricultural tradables? This paper uses a new set of
estimates of policy induced distortions to relative
agricultural prices to address this question
econometrically. First, the authors test if these policy
distortions respond to economic growth, using rainfall and
international commodity price shocks as instrumental
variables. They find that on impact there is no significant
response of relative agricultural price distortions to
changes in real GDP per capita growth. Then, the authors
test the reverse proposition and find a statistically
significant and sizable negative effect of relative
agricultural price distortions on the growth rate of
Sub-Saharan African countries. The fixed effects estimates
yield that, during the 1960-2005 period, a ten percentage
points increase in distortions to relative agricultural
prices decreased the region's real GDP per capita
growth rate by about half a percentage point per annum. |
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