The enduring importance of understanding institutions and values

Papers that pay attention to the socio-economic institutions affecting agricultural change have appeared regularly in this journal. It is important to continue encouraging such papers, as proposals of policies and technology packages for bringing about agricultural sustainability must be grounded in an understanding of both existing institutions and values and the changes needed. The record of my fellow economists in giving due attention to institutions and values over the course of my professional career has, however, been definitely mixed. I was first introduced to institutional economics during graduate school at the University of Maryland in the late 1960s, in particular through the teaching and influence of my major professor, the late Phillips Foster. Foster believed that existing institutions and values were frequently an impediment to agricultural change. I conducted fieldwork for a PhD dissertation in northern India during the autumn/winter period of 1967/1968. My topic was the incentives and disincentives for the adoption of productivity-increasing agricultural inputs, using a broad framework of analysis that accounted for both on-farm profitability and socio-economic institutions. It so happened that the 1967/ 1968 winter (rabi) season was the first in northern India in which there was a coincidence of both favourable irrigation water supplies (after 2 years of severe drought, the monsoons had returned the previous late summer) and fairly widespread availability of the recently introduced high-yielding dwarf wheat variety seeds. The result was a rapid adoption of the high-yielding fertilizer/dwarf wheat input package. My research, and that of others during early stages of the Green Revolution, showed a potentially high profitability of this input package for farmers who had access to irrigation water. Some traditional village institutions such as caste did not appear to be much of a barrier to its adoption. At the same time, however, my broad examination of agricultural institutions revealed some potential constraints. One was the land tenure system that had led to extreme fragmentation of holdings in northern India. My analysis indicated that this was likely to be an impediment to investing in irrigation pumps by many farmers whose holdings were too small and fragmented to efficiently use such pumps, unless there was institutional change such as government-initiated land consolidation. Although I became exposed to the ‘institutional’ perspective at Maryland in the late 1960s, institutional economics was being deemphasized at many other universities at that time. Bright young agricultural economics undergraduates were being encouraged to do their graduate work at universities with a strong reputation in quantitative analytic methods at the time, rather than,