Learning, multiple equilibria, and the state: Agriculture's role

This article will argue that the state must learn to pursue productivity en hancing rather than predatory policies if rapid long-run development is to occur in poor countries. These productivity enhancing strategies will most likely involve investment coordination. However, such coordination of inves tment in manufacturing is likely to fail in less developed countries as a r esult of low productivity in the traditional, agricultural sector. More imp ortantly, investment coordination in agriculture is more likely to be succe ssful especially if this is a broad based investment strategy involving the bulk of the population. In this context, the state will learn effective po licies for coordinating development. Alternatively, if the agricultural sec tor is ignored and productivity here remains low, investment coordination i n manufacturing will likely fail, and the state will learn to become a pred ator.