Department of Computational Social Science Seminar-HENDERSON

Friday, September 20, 3:00 p.m.
Center for Social Complexity Suite
Research Hall, Third Floor

Modern Value Chains and the Organization of Agrarian Production

Heath Henderson, Research Fellow
Office of Strategic Planning and Development Effectiveness
Inter-American Development Bank

ABSTRACT: Empirical studies of agrarian production in developing countries find that smallholders possess a productivity advantage over large farms. Eswaran and Kotwal (1986) famously derive this inverse farm size-productivity relationship from the structure of agrarian production. Their model predicts that in otherwise equivalent economies a more egalitarian land distribution raises output and producer welfare. However, developing countries have recently experienced the rapid emergence of modern value chains. Recent research provides evidence that this transformation alters the welfare possibilities of agrarian economies. We therefore extend the Eswaran-Kotwal model by incorporating a modern value chain. Our results contradict previous sanguine conclusions about egalitarian distributions of the means of production. We observe a potential equity/efficiency tradeoff in the distribution of land.

BIO: Dr. Henderson holds a PhD in economics and an MA in international politics from American University in Washington, DC. His dissertation, titled “Nicaragua, the Food Crisis, and the Future of Smallholder Agriculture,” examined equity-efficiency tradeoffs in the distribution of agricultural landholdings in developing countries by focusing on the case of Nicaragua. Generally speaking, his research interests include agent-based modeling, agricultural development, and applied econometrics.