Agriculture and the State: Growth, Employment, and Poverty in Developing Countries

By C. Peter Timmer | Go to book overview

7
Rural Development:
Problems and Prospects

Cristina C. David

The 1970s witnessed a major shift in official assistance for agriculture and rural development. The persistence of poverty and malnutrition in most of the developing countries, especially in the rural areas, was attributed to the narrow focus on industrialization in the 1950s and 1960s. Since agriculture remains the predominant source of livelihood in these countries, the view that rapid agricultural growth through its strong employment and growth linkage effects in the entire economy will lead to broadly based economic development gained wide adherence. The Green Revolution in rice and wheat, which clearly demonstrated the potential contribution of technical change to productivity growth, further enhanced the belief that a more balanced sectoral approach to development is not only desirable but feasible. In the midst of the food-grain crisis in the early 1970s, Robert McNamara, then president of the World Bank, announced that the major focus of the Bank's rapid expansion would be on rural development to accelerate the alleviation of poverty, and he strongly enjoined other development agencies to follow the same thrust.

Between 1973 and 1980, flows of development assistance and other official assistance for agriculture more than doubled in real terms ( World Bank, 1982). The share of loans for agriculture and rural development made by multilateral institutions rose to nearly 30 percent. Relatively few studies have systematically examined the benefits and costs to developing countries of such project lending. What is known about the performance and the problems associated with

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