Efficiency of research investments in the presence of international spillovers: wheat research in developing countries

Expenditures on agricultural research in the public sector, including the I nternational Agricultural Research Centers (IARCs) have stagnated and in so me cases, declined sharply in recent years. This has focused attention on i ssues of efficiency of agricultural research systems, especially the number , size, scope, type, and locations of their programs. This paper examines t he issue of research efficiency through a case study of wheat improvement r esearch in developing countries. The basic premise of this study is that th e optimal level of research investment should be determined in a global mod el that incorporates direct research spill-ins. An analytical framework is developed to determine the threshold levels of crop production in a country (or a region within a country) needed to justify crop improvement research programs of different sizes in the presence of spill-ins from abroad. Spil l-in coefficients ar estimated from yield performance of varieties of diffe rent origins grown across a range of environments. The model is then applie d to analyze the efficiency of current investments in 69 wheat improvement research programs in 35 developing countries. A major conclusion of the pap er is that given the magnitude of potential spill-ins from the internationa l research system, many wheat research programs could significantly increas e the efficiency of resource use by reducing the size of their wheat resear ch programs and focusing on the screening of varieties developed elsewhere. (C) 2000 Elsevier Science B.V. All rights reserved.