By Johan Swinnen, Scott Rozelle
Learning agrarian transition in additional than 25 international locations from critical and jap Europe, the previous Soviet Union, and East Asia, this publication is the 1st attempt to research the economics and politics of the reforms in agriculture via evaluating the reform techniques, their explanations and their results throughout this giant region.
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Extra resources for From Marx and Mao to the Market: The Economics and Politics of Agricultural Transition
6). 5 can be thought of as snapshots at different moments of the reform process. 6 summarizes key parts of the previous analyses. For example, before transition Socialist farms in Country 2 are subsidized, are allocatively inefﬁcient, and are operating on the technically inefﬁcient Socialist production function, f0(x). Hence, prior to reform they are at point B. With price reform, output declines and farms move towards the allocatively efﬁcient point C. 6 Production allocations with a combination of various reforms and disruptions.
40 A Model of Agricultural Transition In other countries, the disruption effect may not be as large. For example, for a variety of reasons, countries with labour-intensive agricultural systems, ones that use relatively simple inputs and technology, the incentive effects may be strong and disruptions less severe. In such a case, there could be an overall positive effect. 4. The incentive effect increases output from qp (point C) to qp+r (point D), but the disruptions have a negative output effect, equivalent to the distance qp+r (point D) Ϫ qp+dЈ (EЈ).
Conditional proﬁt maximizing occurs when the manager allocates inputs up to the point in which the marginal revenue of the farm’s output (which is equal to the government-set output price times the farm’s marginal product) equals the government-set input price. Although the proﬁts of the Socialist farm are at the maximum point, given the government-set prices, if proﬁts for the Socialist farm’s input and output levels were evaluated at market prices, it would be found that farm proﬁts were lower.