Abstract
Over the last several decades agricultural economists have made major contributions to our understanding of the impact of advances in natural science knowledge on technical change and of the impact of technical change on economic growth. We have also significantly advanced our understanding of the sources of demand for and supply of technical change. Work carried out within the framework of the induced technical change paradigm has demonstrated that technical change can be treated as largely endogenous to the development process (Hayami and Ruttan 1971, Binswanger and Ruttan). We have made less progress in our attempts to understand the contributions of advances in social science knowledge to institutional innovation or of the contribution of institutional innovation to economic, political, or social change. And our knowledge of the sources of demand for and supply of institutional change remains rudimentary. In this paper I suggest an approach to thinking about the sources of demand and supply for institutional change. I then proceed to explore the use of social science knowledge, and the role of social scientists, in the design and evolution of institutional innovations. Finally, I examine the contribution of agricultural economics research and of agricultural economists to the design and evolution of the direct payment approach to farm price and income policy. I follow the lead of Commons and Knight and define institution to include both the behavioral rules that govern patterns of relationships and action as well as decision-making units such as government bureaus, firms, and families. The term institutional change will at times be used to refer to both institutional innovation and to changes in institutional performance.I
Published Version
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