New Thoughts in Need
A Comment on World Bank's “Reaching the Rural Poor:
Strategy for Rural Development”
Justin Yifu Lin
No. E2002002 May 15, 2002
Abstract: In the past 50 years, the rural development strategies, proposed by the World Bank and other international development agencies, aimed to enhance agricultural productivity, with focuses on improving production infrastructure, research, extension and marketing of agricultural product. Such strategies made important contributions to the increases of agricultural supply, calorie intakes, and nutrition improvements. However, because of agricultural product's low income elasticity and price elasticity, the increases in agricultural supply made limited contributions to the increase of farm income. Rural poverty is an unsolved problem in the developing countries that followed the above development strategy. In this paper, I propose to treat the reduction of rural labor as the goal of rural development strategy. Only by reducing rural labor, it is possible to increase rural income with the increase of agricultural production. However, the possibility to accommodate a large out-migration of rural labor depends on the national economy to follow its comparative advantage and develop labor-intensive industries at its early stage of development. Otherwise, the out-migrated rural labor may become urban job-less poor. Only the out-migration of rural labor becomes the main development goal the traditional attempt to increase agricultural productivity can solve the poverty issue in rural area.
Key Words: Rural Development, Poverty, Migration, Comparative Advatnages.