Structural change, dualism and economic development: the role of the vulnerable poor on marginal lands

Edward Barbier

No 6456, Policy Research Working Paper Series from The World Bank

Abstract: Empirical evidence indicates that in many developing regions, the extreme poor in more marginal land areas form a"residual"pool of rural labor. Structural transformation in such developing economies depends crucially on labor and land use decisions of these most-vulnerable populations located on abundant but marginal agricultural land. Although the modern sector may be the source of dynamic growth through learning-by-doing and knowledge spillovers, patterns of labor, land and other natural resources use in the rural economy matter in the overall dynamics of structural change. The concentration of the rural poor on marginal lands is essentially a barometer of economy-wide development. As long as there are abundant marginal lands for cultivation, they serve to absorb rural migrants, increased population, and displaced unskilled labor from elsewhere in the economy. Moreover, the economy is vulnerable to the"Dutch disease"effects of a booming primary products sector. As a consequence, productivity increases and expansion in the commercial primary production sector will cause manufacturing employment and output to contract, until complete specialization occurs. Avoiding such an outcome and combating the inherent dualism of the economy requires both targeted polices for the modern sector and traditional agriculture on marginal lands.

Keywords: Environmental Economics&Policies; Banks&Banking Reform; Economic Theory&Research; Rural Poverty Reduction; Economic Growth (search for similar items in EconPapers)
Date: 2013-05-01
New Economics Papers: this item is included in nep-agr, nep-dev, nep-eff and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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