ABSTRACT
Poverty necessarily reflects relatively low productivity per capita. So perhaps the central challenge in the economics of development revolves around how to increase the productivity of the poor. Moreover, since most of the world’s poor are engaged in agriculture, one might reasonably focus on understanding the economics of improving agricultural productivity. Slow and incomplete adoption of agricultural innovations has severely impeded productivity growth. A vast literature has therefore explored the factors that impede agricultural technology adoption in low-income agrarian nations, emphasizing in particular four general factors: (i) insufficient initial endowments of labor, land or finance necessary to make adoption attractive and/or feasible; (ii) natural resources management problems, especially those related to common property or open access resources; (iii) market failures that degrade the terms of trade faced by smallholders; and (iv) financial market failures that impede investment in improved production technologies or natural resource management practices characterized by significant sunk costs or higher production or price risk. 1
