Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98326
Authors: 
Pande, Rohini
Year of Publication: 
2005
Series/Report no.: 
Center Discussion Paper 922
Abstract: 
This paper examines the political economy of coordination in a simple two-sector model in which individuals' choice of agricultural technology affects industrialization. We demonstrate the existence of multiple equilibria; the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization. Relative to the traditional technology, the mechanized technology increases output but leaves some population groups worse off. We show that the distributional implications of choosing the mechanized technology restrict the possibility of Pareto-improving coordination by an elected policy-maker, even when we allow for income redistribution.
Subjects: 
Industrialization
Choice of Technology
Government Policy
JEL: 
O14
H10
Document Type: 
Working Paper

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