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CID Research Fellow and Graduate Student Working Paper No. 50

May 2011

Market Inefficiencies and the Adoption of Agricultural Technologies in Developing Countries

B. Kelsey Jack

Abstract

This paper summarizes selected research on market inefficiencies that constrain agricultural technology adoption and how these inefficiencies can be overcome. In developing country settings, agricultural technologies that would be profitable in an ideal world without market inefficiencies may go unadopted because of associated market failures, such as lack of access to credit or insecure property rights. The review organizes these barriers to adoption into seven categories and analyzes what we do and do not know about strategies to overcome these barriers. In analyzing this question, the review draws upon relevant findings from agricultural and non-agricultural studies in economics and related disciplines. Particular attention is given to studies that generate rigorous causal evidence, and areas lacking such evidence are noted.

Keywords: technology adoption, agriculture, development, market failures

JEL subject codes: O13, O19, O33, Q10, Q16

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