Inappropriate Technology: Evidence from Global Agriculture

Abstract

An influential hypothesis explaining the persistence of global productivity differences is that frontier technologies are finely tuned to the local conditions of the high-income countries that develop them and inappropriate for application elsewhere. This paper studies how environmental differences between frontier innovators and the rest of the world shape the global diffusion, adoption, and productivity consequences of agricultural technology. Our empirical design uses differences in the presence of unique crop pests and pathogens (CPPs) as a instrument for the appropriateness of crop-specific biotechnology developed in one country and applied in another. We first find that inappropriateness predicted by CPP differences reduces cross-country transfer of novel biotechnology. We next find that inappropriateness relative to frontier innovators reduces adoption of improved seeds and crop-level output. Our estimates suggest that the inappropriateness of the contemporary frontier reduces global productivity by 50% and increases cross-country dispersion in log productivity by 15% relative to a world in which technology were equally productive in all contexts. We use our framework to study how historical and predicted changes in the geography of innovation affect the global distribution of agricultural productivity.