Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/173815 
Year of Publication: 
2016
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-722
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
Economic theory and econometric evidence support the thesis that the displacement of government expenditures on public goods by subsidies to private goods inhibits the performance of the farm sector. This paper presents an analysis of the influence of the mix of expenditures related to agriculture on net income generation, using data for 19 Latin American and Caribbean countries during 1985-2012. The econometric results demonstrate that total government spending on the farm sector positively impacts agriculture's performance. More importantly, and of greater practical economic significance, increasing the share of expenditures committed to public goods, ceteris paribus, would significantly raise rural income as measured by sector value added per capita of the rural population.
Subjects: 
Public Expenditure
Agricultural Policy
Agriculture
Economic Development
JEL: 
H50
O13
Q16
Q17
Q18
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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