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Mon-Chi Lio is based in the Department of Political Economy, National Sun Yat-sen University, 70 Lien-hai Rd., Kaohsiung 804, Taiwan. E-mail: mclio@mail.nsysu.edu.tw for correspondence. Jin-Li Hu is based in the Institute of Business and Management, National Chiao Tung University, Taiwan. Thanks are due to two anonymous reviewers and to the editors for helpful comments on earlier drafts. The authors would also like to thank Tzu-Pu Chang and seminar participants at National Taiwan University for their helpful comments. Partial financial support from Taiwan’s National Science Council (NSC 95-2415-H-110-002 and NSC-95-2415-H-009-001) is gratefully acknowledged. The usual disclaimer applies.
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Governance and Agricultural Production Efficiency: A Cross-Country Aggregate Frontier Analysis
Article first published online: 28 AUG 2008
DOI: 10.1111/j.1477-9552.2008.00172.x
© 2008 The Authors. Journal compilation © 2008 The Agricultural Economics Society
Additional Information
How to Cite
Lio, M.-C. and Hu, J.-L. (2009), Governance and Agricultural Production Efficiency: A Cross-Country Aggregate Frontier Analysis. Journal of Agricultural Economics, 60: 40–61. doi: 10.1111/j.1477-9552.2008.00172.x
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Mon-Chi Lio is based in the Department of Political Economy, National Sun Yat-sen University, 70 Lien-hai Rd., Kaohsiung 804, Taiwan. E-mail: mclio@mail.nsysu.edu.tw for correspondence. Jin-Li Hu is based in the Institute of Business and Management, National Chiao Tung University, Taiwan. Thanks are due to two anonymous reviewers and to the editors for helpful comments on earlier drafts. The authors would also like to thank Tzu-Pu Chang and seminar participants at National Taiwan University for their helpful comments. Partial financial support from Taiwan’s National Science Council (NSC 95-2415-H-110-002 and NSC-95-2415-H-009-001) is gratefully acknowledged. The usual disclaimer applies.
Publication History
- Issue published online: 5 JAN 2009
- Article first published online: 28 AUG 2008
- (Original submitted July 2007, revision received March 2008, accepted April 2008.)
- Abstract
- Article
- References
- Cited By
Keywords:
- Agricultural efficiency and productivity;
- governance;
- stochastic frontier analysis
- O13;
- O47;
- Q17
Abstract
This study uses a stochastic frontier approach to investigate the relationship between six governance indicators and agricultural efficiency. We find that improvements in rule of law, control of corruption and government effectiveness enhance agricultural productivity significantly if each indicator enters the inefficiency equation independently. When all six indicators are included in the equation, we find that an improvement in rule of law raises agricultural efficiency significantly, but increases in voice and accountability and political stability appear to significantly reduce agricultural efficiency. Grouping the six indicators into three dimensions, we find that an improvement in ‘respect for institutional framework’ raises agricultural efficiency significantly, but an enhancement in ‘selection of authority’ reduces agricultural efficiency significantly. Our results imply that poorer countries can enhance their agricultural efficiency substantially by strengthening the state and citizens’ respect for institutional framework. However, our results show that greater democracy is associated with lower agricultural efficiency. This finding is consistent with interest group capture and political failure arguments of the political economy literature.