Abstract
This article will argue that the state must learn to pursue productivity enhancing rather than predatory policies if rapid long-run development is to occur in poor countries. These productivity enhancing strategies will most likely involve investment coordination. However, such coordination of investment in manufacturing is likely to fail in less developed countries as a result of low productivity in the traditional, agricultural sector. More importantly, investment coordination in agriculture is more likely to be successful especially if this is a broad based investment strategy involving the bulk of the population. In this context, the state will learn effective policies for coordinating development. Alternatively, if the agricultural sector is ignored and productivity here remains low, investment coordination in manufacturing will likely fail, and the state will learn to become a predator.
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Richard Grabowski is professor of economics at Southern Illinois University-Carbondale
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Grabowski, R. Learning, multiple equilibria, and the state: Agriculture’s role. St Comp Int Dev 33, 46–69 (1998). https://doi.org/10.1007/BF02687491
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DOI: https://doi.org/10.1007/BF02687491