Structural Changes in Agriculture: Production Linkages and Agricultural Demand-Led Industrialization

Stephen J Vogel

Oxford Economic Papers, 1994, vol. 46, issue 1, 136-56

Abstract: This paper analyzes agriculture's forward and backward multipliers in order to assess the appropriateness of an agricultural-demand-led-industrialization strategy. Cross-section regressions are run on social accounting matrix multipliers and their decompositions obtained from a data set consisting of twenty-seven social accounting matrices. Agriculture's strong backward linkage to nonagriculture makes it a 'leading sector' in A. O. Hirschman's big-push industrialization strategy. The decompositions of these multipliers illuminate the crucial, indirect contributions made by household demands to agricultural production linkages. The potential of the linkages make agricultural-demand-led industrialization an attractive policy alternative for countries at low levels of development. Copyright 1994 by Royal Economic Society.

Date: 1994
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