Pathfinding Paper 4

Agricultural Productivity and Structural Transformation: Evidence and Questions for African Development – Douglas Gollin

In many of the poorest developing countries, including those in sub-Saharan Africa, labour productivity in agriculture is extremely low. In a mechanical sense, these countries are poor because they have low agricultural productivity and because many people work in the agricultural sector. This raises a number of questions moving forward. Why is productivity in agriculture so low? Is this partially a problem of mismeasurement? To the extent that productivity gaps are real, are they evidence of any inefficiency? When, where, and how would agricultural productivity growth lead to sustained, sustainable, and inclusive growth? What obstacles, frictions, and barriers limit this growth? What are the implications for policies directed at agriculture or rural development?

This paper addresses these and other questions in assessing the role of agricultural productivity in achieving structural transformation and growth in sub-Saharan Africa. It starts by documenting sectoral gaps and cross-country productivity differences and will then examines some possible explanations for their existence. This is followed by a historical review of the research that has sought to explain agriculture-led strategies for growth and transformation from the early classical models to recent evidence from micro literature and research on spatial frictions. The paper goes on to consider the role of market failures and policy distortions before examining the historical impact of technology change, the lessons that can be learned from the Green Revolution, and importantly, how the situation is different today in sub-Saharan Africa and post COVID-19. Lastly, this paper will lay sets out policies that can be enacted to promote agricultural productivity growth in different contexts as well as an agenda for future research.