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The World Bank Economic Review Advance Access published online on July 25, 2006
The World Bank Economic Review, doi:10.1093/wber/lhl003
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© The Author 2006. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org

Article

How Endowments, Accumulations, and Choice Determine the Geography of Agricultural Productivity in Ecuador

Donald F. Larson 1 * and Mauricio León 2

1 Senior economist in the Development Research Group at the World Bank
2 coordinator of the Sistema Integrado de Indicadores Sociales del Ecuador, in Ecuador’s Ministry of Social Welfare

* To whom correspondence should be addressed.
Donald F. Larson, E-mail: dlarson{at}worldbank.org


  Abstract

Spatial disparity in incomes and productivity is apparent across and within countries. Most studies of the determinants of such differences focus on cross-country comparisons or location choice among firms. Less studied are the large differences in agricultural productivity within countries related to concentrations of rural poverty. For policy, understanding the determinants of this geography of agricultural productivity is important, because strategies to reduce poverty often feature components designed to boost regional agricultural incomes. Census and endowment data for Ecuador are used to estimate a model of endogenous technology choice to explain large regional differences in agricultural output and factor productivity. A composite-error estimation technique is used to separate systemic determinants from idiosyncratic differences. Simulations are employed to explore policy avenues. The findings suggest a differentiation between the types of policies that promote growth in agriculture generally and those that are more likely to assist the rural poor.


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