Analysing agricultural productivity growth in a framework of institutional quality

Mirza Nomman Ahmed, Sarah Maas and P. Michael Schmitz

No 90793, 2010 IAMO Forum, June 16-18, 2010, Halle (Saale), Germany from Institute of Agricultural Development in Transition Economies (IAMO)

Abstract: This paper addresses the question whether the institutional environment of transition countries in Eastern Europe affects productivity growth in the agricultural sector. Situated in a neoclassical growth framework, a dynamic panel model for the period 1996-2005 provides evidence that poor institutional quality leads to a slowdown in agricultural productivity growth. Productivity growth is limited by a high degree of corruption, which is of particular importance given that corruption has been proven to be most prevalent in Eastern European countries. Moreover, agricultural productivity in countries where privatisation and transferability of land is restricted is found to grow at a slower rate than countries supporting market-oriented land reforms. Interestingly, the results suggest that a high degree of openness leads to a loss in agricultural productivity, suggesting that timing and sequencing of trade reforms matter. An improvement of the poor institutional quality is thus of central importance to accelerate productivity growth in Eastern European countries.

Keywords: Agricultural and Food Policy; Institutional and Behavioral Economics; Political Economy (search for similar items in EconPapers)
Pages: 13
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iamo10:90793

DOI: 10.22004/ag.econ.90793

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