Agricultural Economics Department


Date of this Version

Fall 11-26-2008


published in Agricultural Economics, Vol. 41 (1), January 2010: 15-24.


Today, the international community faces two major development challenges, how to ignite growth and how to establish democracy. Economic research has identified two plausible hypotheses regarding this association. The first hypothesis emphasizes the need to start with democracy and institutions that secure property rights. The second hypothesis emphasizes the need to start with physical and human capital accumulation. In this paper we discuss some of the econometric evidence on the relationship between institutions, human capital, and agricultural productivity growth across developed and developing countries with the objective of finding support for one or the other hypothesis. We use Barro type growth and timing regressions of agricultural growth per worker and TFP rates for a panel of countries during the 1961-2001 period. We find that most variables used in the literature to capture the effect of institutions are not independent of the process of growth. While no evidence of causation from political institutions to agricultural productivity growth is found, human capital accumulation emerges as an important source of growth.