BEST-PRACTICE TECHNOLOGY IN AN ADVERSE ENVIRONMENT - THE CASE OF INDIAN SUGAR, 1981-1986

Empirical production frontiers are sometimes observed to shift downwar d over certain periods of time, associating higher quantities of input with lower quantities of output, This phenomenon is quite different t han an increase in observed inefficiency relative to best-practice, We find such a shift for the Indian vacuum-pan sugar industry, and ident ify its cause as environmental adversity reducing the performance of b est-practice technology, Specifically, agro-climatic difficulties exac erbated by regulation-induced rigidities provide the adverse environme nt, The case serves as a context for a re-examination of the concepts of best-practice technology and technological regress.