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Abstract
This paper provides a formal model of technology
choice by a single region. Case studies have
indicated that the technology acquired by LDCs
often seem unsuitable, although the criteria for
suitability are often unclear. The reasons
which are presented for inappropriateness of the
selection often rely more on political arguments
then economic ones, or treat the recipient country
as a passive actor in the whole process.
Can a technology actively selected by a recipient
country ever by inappropriate, assuming
factor cost ratios represent true relative values?
A model presented by Evenson and Bingswanger
(1978) indicates that a technology developed in
one economic or physical environment may be
'appropriate' to a second, very different environment
if the second environment can generate a
very limited range of technological possibilities
on its own. Ranis (1978) has emphasized the importance
of information on technological alternatives
flowing smoothly and accurately within
the system and the need to acquire capacity for
adaptive research. Both these approaches recognize
the importance of indigenous research
capacity, although Ranis accords more emphasis
to friction and proper incentives within the
system. Barring policy and management problems,
their conclusions appear to be that technology
choice will be efficient--the appearance of inappropriateness
stems from the lack of explicit
recognition of the constraints on technology
generation in the system.
The model presented below builds on the early
models of rational technology selection of Evenson-
Binswanger and Ranis. It shares common elements
with the Evenson-Binswanger model and may
be regarded as a generalization of their model.
It goes further, however, in several crucial aspects.
It allows the extent of both adaptive
and independent research to be choice variables
in the technology acquisition decision. It
allows for selection out of a continuum of technologies
which differ in the environments for
which they were designed. It allows for limits
to the extent to which technologies can be
adapted across environments and allows for
losses because of incomplete adaption. The
public goodnature of research plays a critical
role in determining the efficiency of resource
allocation as well.
The model presented immediately below is
couched in terms relating to agricultural technology.
A reason for first presenting a model
of agricultural technology selection is that
many of the conceptual issues possess more intuitive
natural interpretations. A second
section will consider the impact of market
structure on the development of technology, and
a third section will broaden the basic model of
agricultural technology development to one which
encompasses certain types of fixed capital investment.
A fourth section discusses testing of
the model.