Asset inequality and agricultural growth: how are patterns of asset inequality established and reproduced?

Asset inequality and agricultural growth: how are patterns of asset inequality established and reproduced?

How does differential access to productive assets affect inequalities in agricultural outcomes?

This paper reviews the literature on the relationships between inequality and agricultural growth. It emphasises the social and political constructions of inequalities, particularly inequality affects growth which in turn exacerbate and reproduce these inequalities. Within this, the author investigates the policies and institutions that tend to promote equally shared growth and argues that the dominant discourse on agricultural productivity and distribution has, so far, been largely technocratic.

In terms of the literature on farm size and agricultural growth, the indication is that transactions costs, factor scarcities and factor prices have implications for inequalities in farm size distributions in different contexts. Additionally, the feminist literature and gendered analysis of inequality complements Kanbur’s recent critique of the growth and inequality literature. This critique highlights the need to focus on policy variables that enable output factors (such as income equality, more equal access to resources) to be causally related.

Four main conclusions emerge from this literature review:

  • inequality does not necessarily reduce productivity or growth: relationships between asset inequality and productivity must be understood in the context of constrained markets, factor prices and factor scarcities. Efficient distribution of assets in any context will depend largely on an understanding of these issues and complementary factor markets for any one asset being investigated. It will also depend upon how we measure equality.
  • inequality reproduces inequality due to economic reasons. Asset and endowment dependency are phenomena related to transaction costs and market failures. They lead to path-dependent, inefficient distributions of assets, and poverty traps. These cycles of asset and endowment dependency can be remedied in part by asset redistribution and/or eliminating constraints in markets
  • causes of inequality are also political and social: causes of inequality are political and social by nature, reflecting a combination of historical choices, unequal opportunities and access, inequalities in empowerment, unequal power relations, exclusion, oppression and domination.
  • the combination of asset inequality, market failure and unequal access to resources and institutions reproduces inequality, and can also cause persistent poverty: the combination of these factors leads to differential productivity between asset rich and asset poor. While the implication for increasing asset inequality over time does not have unambiguous implications for absolute poverty, it is likely that relative poverty/subjective poverty will increase over time.
[adapted from author]
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