RIEB, Kobe University

Dynamic and Long-term Linkages among Agricultural and Non-Agricultural Growth, Inequality and Poverty in Developing Countries

Drawing upon cross-country panel data for developing countries, the present study examines the role of agricultural growth in reducing inequality and poverty by modelling the dynamic linkage between agricultural and non-agricultural sectors. For this purpose, we have compared the role of agricultural growth and that of non-agricultural growth and have found that agricultural growth is more important in reducing poverty, while the negative effect of agricultural growth on inequality is found in a few models where specific definitions of inequality are adopted. Our analysis generally reinforces the case for revival of agriculture in the post-2015 discourse, contrary to the much emphasised roles of rural-urban migration and urbanisation as main drivers of growth and elimination of extreme poverty.