By Steven R. Tabor
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Extra resources for Agricultural research in an era of adjustment: policies, institutions, and progress
Page 8 Figure 1-1. Paths of Structural Adjustment: A Stylized View Tradable goods are an amalgam of exportable and importable goods whose domestic prices are determined by world market conditions, together with the country's trade and exchange rate policies. Nontradable or home goods are that part of the economy's production that does not enter international trade. As a result, domestic supply and demand determine their prices. Most agricultural output in developing countries can be classified as tradable.
By capitalizing on the lessons of past experience, developing countries should be able to ensure that future structural adjustment will strengthen rather than constrain the national agricultural research effort. To bring about such developments, policymakers will need to be more sensitive to the possible effects of adjustment on technological capacity. Conversely, research leaders will need to take a more active role in contributing to decisionmaking on economic policy reform. It is hoped that this book will contribute to the necessary dialogue on this topic.
There is little point in pursuing the issue here. Suffice to note that there is no simple, useful distinction between the two. Some argue that stabilization policies are those that attempt to restrain demand, while structural adjustment policies intend to increase aggregate supply. Nevertheless, it may well be the case that in addressing the imbalances that have led to financial instability, a country should focus on increasing the supply from some sectors. Where massive interventions have reduced the profitability of, say, an export crop, then a central part of a stabilization policy may be an element of so-called structural adjustment, involving a realignment of relative prices.
Agricultural research in an era of adjustment: policies, institutions, and progress by Steven R. Tabor