Demographic influences on economic *growth, inequality and the political economy of agricultural policy across countries

Andres F Garcia, Purdue University

Abstract

This dissertation asks how two large, long-term trends associated with economic development interact with each other and help determine economic outcomes across countries and over time. These two trends are, first the demographic transition from large to small families, and second the structural transformation from farm to nonfarm employment. We show these transitions, manifested in a country’s rate of population growth and share of labor still in agriculture, drive trends in the number of farmers which in turn are closely associated with changes in economic growth and income inequality. Agricultural policy is also important, and in our political economy chapter we test a variety of explanations for political forces, finding results consistent with hypothesized effects of rural and urban constituents’ rational ignorance about small per-person effects, governance institutions’ control of rent-seeking by political leaders, governments’ revenue motive for taxation and the role of time consistency in policy-making. A novel result is that demographically driven entry of new farmers is associated with less favorable farm policies, which is consistent with a model in which the arrival of new farmers erodes policy rents and discourages political activity by incumbents.

Degree

Ph.D.

Advisors

Masters, Purdue University.

Subject Area

Agricultural economics|Demography

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