Agricultural productivity and its determinants: revisiting international experiences

Abstract

This paper makes three contributions to the literature on agricultural productivity. First, we provide estimates of growth in agriculture’s total factor productivity (TFP) for a panel of countries using a translog-production function. In contrast to most of the existing literature, the evidence suggests that agricultural TFP growth in developing countries has been positive during the past four decades. Second, the empirical analysis looks at the determinants of agricultural productivity by controlling for infrastructure and other public goods. Third, we pay close attention to international heterogeneity with a special focus on Latin American and Caribbean (LAC) countries. The econometric results suggest that electricity generating capacity per capita has had positive effects on agricultural TFP, whereas roads and credit availability have had negative effects worldwide. Literacy also appears to be important for promoting agricultural productivity. The regression models also control for climactic anomalies and coup d’etat, factors that are rarely found in the literature. Finally, agricultural productivity in LAC countries behaved differently than in other regions: electricity generation was especially relevant before the 1990s, as in the rest of the sample, but its effect declined thereafter; paved roads in LAC appear to influence positively agricultural productivity throughout the period under investigation (1960-1997).