Larson, Donald F.
Development Research Group, World Bank
Author Name Variants
Fields of Specialization
Rural Development Policy; Natural Resource Policy; Agricultural Productivity and Growth; Climate Change Policy and Markets; Commodity Markets and Risk
Development Research Group, World Bank
Externally Hosted Work
Last updated January 31, 2023
Donald F. Larson is a Senior Economist with the World Bank’s Development Research Group. He holds a B.A in economics from the College of William and Mary, an M.A. in economics from Virginia Tech, and a Ph.D. in Agricultural and Resource Economics from the University of Maryland. With colleagues, he has authored or edited five books, including An African Green Revolution: Finding Ways to Boost Productivity on Small Farms, a forthcoming volume from Springer, and The Clean Development Mechanism: An Early History of Unanticipated Outcomes, a forthcoming volume from World Scientific. He has published numerous book chapters and journal articles, with an emphasis on agricultural productivity and growth; food and rural development policies; natural resource policies; the institutions and markets related to climate change; and the performance of commodity futures and risk markets. During his time with the World Bank, Don has participated in policy discussion in Africa, Eastern Europe, Central Asia, East Asia, Latin America, and the Caribbean. He was a member of the team that launched the World Bank’s Prototype Carbon Fund.
Publication Search Results
Now showing 1 - 10 of 11
Publication(Washington, DC: World Bank, 2001-03) Akiyama, Takamasa ; Baffes, John ; Larson, Donald ; Varangis, PanosStructural reform of the economies of developing countries has been in the forefront of development interest since the early 1980s. This interest stems from a recognition that the structures and institutions of these countries are critical to any enhancement of economic and social development. One of the key reforms has been that of primary commodity markets, especially agricultural commodity markets, because many developing countries, including the poorest, depend heavily on these for foreign exchange earnings and employment, and hence for poverty reduction. This report focuses on the political economy and institutional aspects of agricultural commodity market reform. In order to explore in detail factors that are critical to the processes, consequences, and substance of reform, the authors have focused the analysis and evaluation on five commodities important in many developing countries, specifically cocoa, coffee, sugar, cotton, and cereal. In doing so, they highlight important lessons on how agricultural sector reform can be launched and implemented. Some of the factors identified in the report as being key to successful reform include the recognition that commodity markets often affect communities and even politics, that the initial conditions of markets are critical, and that government intervention can crowd out private sector initiatives, especially when it comes to building the institutions needed to develop a healthy agricultural sector.
Publication(World Bank, Washington, D.C., 2002-03) Mundlack, Yair ; Larson, Donald F. ; Butzer, RitaThe introduction of new high-yielding varieties of cereals in the 1960s, known as the green revolution. Changed dramatically the food supply I Asia, as well as in other countries. The authors examine over an extended period, the growth consequences for agriculture in Indonesia, the Philippines, and Thailand. Despite geographic proximity, similar climate, and other shared characteristics, gains in productivity, and income differed significantly among the countries. The authors quantify these differences, and examine their determinants. They find that the new technology changed the returns to fertilizers, irrigated land, and capital, all of which proved scarce to varying degrees, Complementing technology-related changes in factor use were investments - public and private - driven in part by policy. The authors find that factor accumulation played an important role in output growth, and that accumulations from policy-driven investments in human capital, and public infrastructure, were important sources of productivity gains. They conclude that policies that ease constraints on factor markets, and promote public investment in people, and infrastructure, provide the best opportunities for agricultural growth.
Publication(World Bank, Washington, DC, 2002-02) Larson, Donald F. ; Plessmann, FrankFarming households that differ in their ability, or willingness to take on risks are likely to make different decisions when allocating resources, and effort among income-producing activities, with consequences for productivity. The authors measure voluntary, and involuntary departures from efficiency for rice-producing households in Bicol, Philippines. They take advantage of a panel of household observations from 1978, 1983, and 1994. The unusually long-time span of the panel provides ample opportunities for the surveyed households to learn, and apply successful available technologies. The authors find evidence that diversification, and technology choices do effect outcomes among farmers, although these effects are not dominant. Accumulated wealth, past decisions to invest in education, favorable market conditions, and propitious weather are also important determinants of efficiency outcomes among Bicol rice farmers.
How Endowments, Accumulations, and Choice Determine the Geography of Agricultural Productivity in Ecuador(Oxford University Press on behalf of the World Bank, 2006-09-01) Larson, Donald F. ; Leon, MauricioSpatial disparity in incomes and productivity is apparent across and within countries. Most studies of the determinants of such differences focus on cross-country comparisons or location choice among firms. Less studied are the large differences in agricultural productivity within countries related to concentrations of rural poverty. For policy, understanding the determinants of this geography of agricultural productivity is important, because strategies to reduce poverty often feature components designed to boost regional agricultural incomes. Census and endowment data for Ecuador are used to estimate a model of endogenous technology choice to explain large regional differences in agricultural output and factor productivity. A composite-error estimation technique is used to separate systemic determinants from idiosyncratic differences. Simulations are employed to explore policy avenues. The findings suggest a differentiation between the types of policies that promote growth in agriculture generally and those that are more likely to assist the rural poor.
A Conceptual Model of Incomplete Markets and the Consequences for Technology Adoption Policies in Ethiopia(World Bank, Washington, DC, 2013-10) Larson, Donald F. ; Gurara, Daniel ZerfuIn Africa, farmers have been reluctant to take up new varieties of staple crops developed to boost smallholder yields and rural incomes. Low fertilizer use is often mentioned as a proximate cause, but some believe the problem originates with incomplete input markets. As a remedy, African governments have introduced technology adoption programs with fertilizer subsidies as a core component. Still, the links between market performance and choices about using fertilizer are poorly articulated in empirical studies and policy discussions, making it difficult to judge whether the programs are expected to generate lasting benefits or to simply offset high fertilizer prices. This paper develops a conceptual model to show how choices made by agents supplying input services combine with household livelihood settings to generate heterogeneous decisions about fertilizer use. An applied model is estimated with data from a panel survey in rural Ethiopia. The results suggest that adverse market conditions limit the adoption of fertilizer-based technologies, especially among resource-poor households. Farmers appear to respond to market signals in the aggregate and this provides a pathway for subsidies to stimulate demand. However, the research suggests that lowering transaction costs, through investments in infrastructure and market institutions, can generate deeper effects by expanding the technologies available to farmers across all pricing outcomes.
Publication(World Bank, Washington, DC, 2003-01) Butzer, Rita ; Mundlak, Yair ; Larson, Donald F.Using time series data spanning three decades, the authors examine the determinants of sectoral migration in Indonesia, Thailand and the Philippines. They employ a principal components algorithm to address problems associated with trended and inter-correlated explanatory variables. Migration rates in the three countries are low relative to other developing countries with the consequence of persistent inter-sectoral income differentials. Even so, the rate of migration has been responsive to income ratios in each country. The migration rates were also affected by the absorbing capacity of non-agriculture, as indicated by several measures. In contrast to other studies, policy variables consisting of indicators of physical and human capital had little impact on the migration rate separate from that captured by relative incomes.
Publication(World Bank, Washington, DC, 2003-03) Akiyama, Takamasa ; Baffes, John ; Larson, Donald F. ; Varangis, PanosSince the early 1980s, dramatic changes in export commodity markets, shocks associated with resulting price declines, and changing views on the role of the state have ushered in widespread reforms to agricultural commodity markets in Africa. The reforms significantly reduced government participation in the marketing and pricing of commodities. Akiyama, Baffes, Larson, and Varangis examine the background, causes, process, and consequences of these reforms and derive lessons for successful reforms from experiences in markets for four commodities important to Africa-cocoa, coffee, cotton, and sugar. The authors' commodity focus highlights the special features associated with these markets that affect the reform process. They complement the current literature on market reforms in Africa, where grain-market studies are more common. The authors suggest that the types of market interventions prior to reform are more easily classified by crop than by country. Consequently, there are significant commodity-specific differences in the initial conditions and in the outcomes of reforms related to these markets. But there are general lessons as well. The authors find that the key consequences of reform have been significant changes in or emergence of marketing institutions and a significant shift of political and economic power from the public to the private sector. In cases where interventions were greatest and reforms most complete, producers have benefited from receiving a larger share of export prices. Additionally, the authors conclude that the adjustment costs of reform can be reduced in most cases by better understanding the detailed and idiosyncratic relationships between the commodity subsector, private markets, and public services. Finally, while there are significant costs to market-dependent reforms, experiences suggest that they are a necessary step toward a dynamic commodity sector based on private initiative. This is particularly true in countries and sectors where interventions were greatest and market-supporting institutions the weakest.
Publication(World Bank, Washington, DC, 2001-05) Larson, Donald F. ; Borrell, BrentReviewing cross-country experience with sugar policies, and policy reform, the authors conclude that long-standing government interventions - rooted in historical trade arrangements, fear of shortages, and conflicting interests between growers, and sugar mills - often displace both the markets, and the institutions required to produce efficient outcomes. Arrangements rooted in colonial eras, still shape policies, and trade in the United States, the European Union (EU), and many developing countries. Once policies, and institutions are put in place, households, and the value of investments grow dependent on them, even as their usefulness fades. Firms and households make decisions that are costly to reverse. And the result is a legacy of path-dependent policies, in which approaches, and instruments are greatly influenced by past agreements, and previous interventions. The cumulative effects of these interventions are embodied in livelihoods, political institutions, capital stocks, and factor markets - which not only dictate the starting point for reform, but also determine which reform paths are feasible. Experiments with public ownership, common in many countries, have not succeeded. So most countries have initiated some measure of market reform. And events relating to NAFTA, Lome, and expansion of the EU, may bring about significant changes in the EU, and US sugar regimes, with cascading effects on other countries. Common problems in the sector include determining cane quality, finding methods for fairly sharing revenues from joint production, finding ways to take advantage of preferential trade arrangements with minimal negative consequences, finding ways to finance, and encourage research, and other activities with common benefits, identifying practices that facilitate equitable, sustainable privatization, and determining the relationship between sugar market reform, and markets in land, water, credit, and other inputs.
Publication(World Bank Group, Washington, DC, 2014-10) Larson, Donald F. ; Martin, Will ; Sahin, Sebnem ; Tsigas, MarinoIn 1959, shortly after the European Economic Community was founded under the 1957 Treaty of Rome, Turkey applied for Associate Membership in the then six-member common market. By 1963, a path for integrating the economies of Turkey and the eventual European Union had been mapped. As with many trade agreements, agriculture posed difficult political hurdles, which were never fully cleared, even as trade barriers to other sectors were eventually removed and a Customs Union formed. This essay traces the influences the Turkey-European Union economic institutions have had on agricultural policies and the agriculture sector. An applied general equilibrium framework is used to provide estimates of what including agriculture under the Customs Union would mean for the sector and the economy. The paper also discusses the implications of fully aligning Turkey's agricultural policies with the European Union's Common Agricultural Policy, as would be required under full membership.
Publication(World Bank, Washington, DC, 2012-04) Larson, Donald F. ; Lampietti, Julian ; Gouel, Christophe ; Cafiero, Carlo ; Roberts, JohnIn times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps.