Induced Adjustment and the Role of Agriculture in Economic Development: A Case Study of Egypt and Syria

The initial economic development of United Kingdom, the United States, and Japan began with the development of agriculture, which in due course provided the marketable agricultural surplus of raw materials for their industry and of food for their industrial workers, in addition to the purchasing power to their agriculturists for buying the industrial goods produced. The realization of this historical role of agriculture in the process of modern economic development has not only made the development of agriculture a respectable initial strategy for developing an economy but has also made the reasons for the successful development of agriculture a matter of serious consideration. This chapter explores the extent to which the experiences of the United States and Japan have been duplicated in the underdeveloped world. The chapter presents a study of two countries in the Middle East, Egypt, and Syria, the former with a relative scarcity of land similar to Japan's and the latter with a relative abundance of land similar to the United States. The idea of induced innovation is essentially an extension of the idea of factor substitution in response to changing factor prices (scarcity), when such a change does not only cause factor substitution given the production function; however, it also determines the choice of a new production function.