Agricultural Sector Development and Structural Transformation : Sub-Saharan Africa versus East Asia

Abstract

This study examines the nature of economic stagnation in the majority of the countries in Sub-Saharan Africa (SSA) and discusses different approaches to structural transformation of their traditional agriculture- based economies. The argument is that the economies and people of SSA countries suffer from a Malthusian stagnation and poverty. This study attributes the Malthusian stagnation to underutilization of the richly endowed land and other agricultural resources, which in turn is due to the prevalence of communal ownership of land in rural areas. It argues that the traditional institution has kept agricultural productivity at extremely low levels and prevented a demographic dividend from being created. This study reviews the experiences of East Asian and other countries in their early stage of economic development along with those of SSA to understand the process of an economic takeoff. From this emerges the importance of broad-based agricultural development in enabling a traditional agriculture-based economy to get prepared for the takeoff. In particular, it turns out that internalizing the external effects of agricultural development on human development and its effects on savings is the key. It also finds supportive evidences from panel-data analyses of the dynamic driving forces in different stages of economic development.