Land expansion and growth in low- and middle-income countries

Edward Barbier

Australian Journal of Agricultural and Resource Economics, 2020, vol. 65, issue 01

Abstract: Over past decades, low and middle-income countries have experienced considerable expansion of agricultural land, yet this effect on growth has not been examined The following paper shows that the Solow-Swan growth model can be extended to the case whereby arable land is expanding, as originally suggested by Solow (1956). This extension indicates that land expansion boosts growth, and this effect increases with the relative share of land in income. An empirical analysis over 1990–2018 for 138 low and middle-income countries supports this finding. The growth impact of land expansion over 1990–2018 varied significantly across the sample of countries depending on how much income was derived from land. This result explains why countries dependent on agriculture have engaged in extensive land expansion: it boosts overall growth. However, these growth benefits must be weighed against the considerable environmental costs of converting forests and other natural habitat to more agricultural land, such as increased carbon emissions, loss of ecosystem services and biodiversity, risk of disease, and impacts on local livelihoods.

Keywords: Environmental Economics and Policy; Land Economics/Use (search for similar items in EconPapers)
Date: 2020
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Journal Article: Land expansion and growth in low‐ and middle‐income countries (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:342946

DOI: 10.22004/ag.econ.342946

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