Does anti-corruption effort facilitate agricultural production progress?

Rustam Rakhmetov (IAMO)

Abstract

Agriculture is critical to the livelihoods of a large proportion of rural households in a number of emerging and transitioning economies. Agriculture is a priority in Kazakhstan and Russia, not just for social reasons, but also for economic diversification. Kazakhstan and Russia are post-Soviet examples of how different supportive policies in the agricultural sector have a range of output effects across diverse entrepreneurial structures. While in some regions, cattle production growth happens due to an increase in heard size, further compensating the decline in cattle production by increasing beef production. One explanation for this line of research is regional differences in governance. These differences include allocation of government support to agriculture, land property allocation, access to bank loans, and effort to control corruption. We assume that the major impediment to agricultural progress, namely cattle and beef, is local corruption that misallocates public resources and benefits-seeking individuals. We investigate how easing bureaucratic corruption affects the upper stream – cattle raising and downstream beef production. Finally, we investigate the effect of institutional differences on livestock production through the lens of entrepreneurial and production effects. The findings highlight that anti-corruption effort has a stronger short-term effect on production, a greater effect on smaller producers, and a more substantial effect on downstream production that requires more technological advantages.

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