Causes of Rural Economic Development

This paper investigates the sources of growth in agricultural value-added (GDP) and rural household incomes using a sample of developing countries. The main factors are: (i) providing macroeconomic and political stability; (ii) institutions establishing property rights and incentives; (iii) access to competitive input markets and remunerative output markets; and (iv) adoption of productivity-enhancing technology, and (v) real income growth in the non-agricultural economy. The evidence indicates a surprisingly large role of the fifth of these