Democracy and Agricultural Productivity

This study attempts to empirically examine the impact of democracy on agricultural productivity by estimating a cross-country agricultural production function. In the regressions, we control the education, economic freedom, climate and geographic variables, in order to see if democracy can still explain a significant portion of the heterogeneity of agricultural productivities across countries. Our empirical results indicate that democracy has no significant effects on agricultural production if the effects of education and economic freedom are controlled. Nevertheless, while the empirical findings do not support the hypothesis that democracy can directly enhance agricultural productivity, they do not rule out the theoretical possibility that democracy may indirectly foster agricultural productivity by firstly influencing the level of economic freedom. In order to examine this possibility, we set up and test a structural equation model. The empirical results indicate that democracy can be helpful to economic freedom, and that the latter can in turn enhance agricultural productivity. * Corresponding author address for correspondence: Department of Political Economy, National Sun Yat-sen University, 70 Lien-hai Rd. Kaohsiung 804, Taiwan. E-mail: [email protected]. ** Chung-Hua Institution for Economic Research, Taipei, Taiwan. Email: [email protected].