Institutions and Global Crop Yields

David Wuepper, Haoyu Wang, Wolfram Schlenker, Meha Jain and Robert Finger

No 31426, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate annual discontinuities in remotely-sensed crop yields at all international land borders and link them to changes in the economic freedom index by the Fraser Institute, a country-level measure of institutional quality. Each point of the ten-point index increases the discontinuity by 2.2% over the next five years, highlighting that institutional reforms have the potential to close some of the observed crop yield gap. Three subcategories are consistently significant: credit market regulation, inflation, and the top marginal tax rate. We present suggestive evidence that higher average yields are achieved through increased use of irrigation and mechanization. Yield variability remains unchanged, and reforms lead to cropland expansion through deforestation.

JEL-codes: O13 Q1 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-agr and nep-int
Note: EEE POL
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