Resource information
Empirical evidence indicates that in
many developing regions, the extreme poor in more marginal
land areas form a "residual" pool of rural labor.
Structural transformation in such developing economies
depends crucially on labor and land use decisions of these
most-vulnerable populations located on abundant but marginal
agricultural land. Although the modern sector may be the
source of dynamic growth through learning-by-doing and
knowledge spillovers, patterns of labor, land and other
natural resources use in the rural economy matter in the
overall dynamics of structural change. The concentration of
the rural poor on marginal lands is essentially a barometer
of economy-wide development. As long as there are abundant
marginal lands for cultivation, they serve to absorb rural
migrants, increased population, and displaced unskilled
labor from elsewhere in the economy. Moreover, the economy
is vulnerable to the "Dutch disease" effects of a
booming primary products sector. As a consequence,
productivity increases and expansion in the commercial
primary production sector will cause manufacturing
employment and output to contract, until complete
specialization occurs. Avoiding such an outcome and
combating the inherent dualism of the economy requires both
targeted polices for the modern sector and traditional
agriculture on marginal lands.
