Immiserized growth in liberalized agriculture

This paper offers a simple model that reconciles rivalrous claims about liberalization's impact on low-income agrarian economies; growth can accompany smallholder welfare reduction. The model developed here reverses the causality of Bhagwati's immiserizing growth model:price shocks cause welfare effects that drive output response, rather than output shocks causing price shocks and then welfare effects, as in the trade theoretic original. Immiserized growth seems a plausible explanation for some important cases - e.g. the Malagasay case considered here - in which liberalization appears to have engendered both real agricultural growth and heightened food security stress among smallholder food producers. (C) 1998 Elsevier Science Ltd. All rights reserved.