Why Zimbabwe Cannot Leapfrog Agriculture

by Peter Timmer

When I first saw these photos, I found them scary. They represented my worst nightmare of how badly a country can shoot itself in the foot while trying to traverse what is always a difficult development path. Self-inflicted pain and politically-driven obstacles placed on that path seem stupid. Still, there might be a method in the madness, no matter how misguided.

Suppose Zimbabwe's leaders decided they lived in a world where all food and agricultural products could be sourced from international markets, and they no longer needed a productive domestic agricultural sector (except for political rhetoric about land reform and rewarding close friends). This "world without agriculture" is not imaginary. Many of the world's poorest countries, especially in Africa, have been urged to consider a future without agriculture as the efficient path to development. Mark Rosenzweig, at the time the Director of Harvard's Center for International Development, asked "Should Africa do any agriculture at all?" (Harvard Magazine, 2004, p. 57) [1]. Adrian Wood, then the Chief Economist for DfID, envisioned a "hollowed out" Africa, with most of the population on the coasts where they could more effectively produce manufactured exports (Wood, 2002) [2]. Many macro economists, convinced of the power of rapid economic growth to lift populations out of poverty, see resources devoted to slow-growing agriculture as wasted. In a world of ample food supplies in world markets (some of it free as food aid) and increasingly open borders for trade, what is the role of agriculture in development? Can Zimbabwe destroy its agricultural sector and still develop its economy?

Historically, the answer is clear. No country has been able to sustain a rapid transition out of poverty without raising productivity in its agricultural sector (if it had one to start--Singapore and Hong Kong are exceptions). The process involves a successful structural transformation where agriculture, through higher productivity, provides food, labor, and even savings to the process of urbanization and industrialization. A dynamic agriculture raises labor productivity in the rural economy, pulls up wages, and gradually eliminates the worst dimensions of absolute poverty. Somewhat paradoxically, the process also leads to a decline in the relative importance of agriculture to the overall economy, as the industrial and service sectors grow even more rapidly, partly through stimulus from a modernizing agriculture and migration of rural workers to urban jobs. Ten years ago, Zimbabwe seemed headed down that path of sustainable development.

Viewed from this historical perspective, Zimbabwe now seems to be making a tragic mistake by destroying its commercial agriculture. Not only is the country no longer the bread basket of Africa, it is dependent on increasingly skeptical donors for food aid to feed its own people. Food aid can be a useful supplement to domestic supplies in an emergency, but no country has mounted a successful development program while dependent on food aid.

Development economists are likely to follow Zimbabwe's experience with considerable interest, because rarely has a controlled experiment of this magnitude been carried out on a country's entire development strategy. Most of us think secure property rights are essential to agricultural modernization, and for a county as poor as Zimbabwe is now, such modernization will be essential to further development of the country's entire economy.

This entire experiment with communal agriculture--and the calculated destruction of the commercial agricultural economy and the investments that supported its high productivity--along with Zimbabwe's apparent willingness to become dependent on fickle food aid supplies, seems destined to end badly, either as a slow descent into worse hunger and poverty, or in a cataclysmic catastrophe caused by a wide-spread crop failure and subsequent flight of much of the population across borders in search of food. With 3-4 million of Zimbabwe's population already gone, we may already be witnessing this flight.

These pictures are telling a tragic story of political miscalculation, but they are also telling a story about the power of institutions and incentives. This power is often felt only indirectly and in the longest of long terms. Policy makers often are reluctant to trust the inferences of economic historians on such crucial topics. But here is visual, even gut-wrenching evidence, that institutions, such as property rights, and incentives, in the form of returns on investments, matter far more than the day-to-day political squabbles that drive most capitals. This is evidence for all development economists, not just those in Harare.

1. Harvard Magazine. 2004. "John Harvard's Journal: Re-Development," Nov.-Dec. Vol. 107, page 57.
2. Wood, Adrian. 2002. "Could Africa Be Like America?." Address to the Advisory Board of the Research Program on Enterprise Development (RPED), World Bank.