Efficiency Change, Technological Progress and Sources of Long Term Agricultural Productivity Growth in Selected MENA Countries

Abstract

We investigate the factors that affect total factor productivity growth in MENA countries. To this end, we start first by examining levels and trends in agricultural outputs and productivity growth using Torqnovist Indexes and then computing Malmquist Indexes for three MENA countries representing three different agro-ecological areas; irrigated (Egypt), rainfed (Tunisia) and rangeland (Jordan) over the period 1961-2012. We make use of data drawn from the Food and Agriculture Organization (FAO) dataset. The advantage of this decomposition is that allows decomposing TFP into its two components, namely technical efficiency (TEF) and technological change (TECH). The analysis was complemented by econometric regression of the obtained TECH, considered as the most important long-run driver of TFP growth, scores on a set of potential explicative variables. Turning to the determinants of the components of TECH, the paper findings showed that TFP can be increased due to the increasing in human capital, share of the main crop harvested in each country, and resource reallocation-agricultural employment share. The main implication policy of this research is that growth and determinants of TFP are essential for assessing the country past and potential economic performance, and the gains in TFP drive gains in income and growth.