Explaining Agricultural Productivity Levels and Growth: An International Perspective

With persistent population growth, a dwindling supply of arable land per capita, and the relatively high income elasticity of demand for food in developing countries, there is a growing need for food supply increases to originate from growth in productivity rather than expansions in inputs. In this paper the authors construct levels of total factor productivity in agriculture for 111 countries covering the years 1970 to 2000. Employing this data in panel and cross-sectional regressions, the authors seek to explain levels and trends in total factor productivity (TFP) in world agriculture, examining the relative roles of environmental and geographical factors, human capital, macroeconomic factors, technological processes resulting from globalization and the Green Revolution, and institutional factors such as measures of land inequality and proxies for urban biases in public and private expenditure. The authors conclude that, in addition to standard explanations of productivity improvements such as human capital, openness and environmental factors, both urban biases and inequality have been major impediments to successful rural development.