Country Risk and Agricultural Productivity: An Efficiency Study

Do the social, economic and political environment in a country affect agricultural efficiency? We address this question by estimating a stochastic frontier model of agricultural productivity in 138 countries from 1984 to 2013. By observing how the business condition, level of social harmony and quality of government in a country affect agricultural inefficiency, we find there to be a positive effect. However, land quality as quantified by percentage of land irrigated, and openness to global trade have a more positive effect on decreasing agricultural productivity. We also find that consistent with literature, former British colonies exhibit higher technical efficiency