InSTePP research covers a wide breadth of research and development (R&D) and innovation issues, including tracking and interpreting changes in global R&D investments—with an emphasis on investments in the life sciences—, and shifts in public and private roles in the finance and performance of R&D. Investments in R&D have economic consequences. InSTePP develops and applies methods to evaluate these consequences, and also reviews the economic evidence on the returns to R&D more generally.
Research Highlights
The Economics of Agricultural Innovation
Alston, J.M., and P.G. Pardey. 2021. "The Economics of Agricultural Innovation." In C.B. Barrett, and D.R. Just eds. Handbook of Agricultural Economics. Elsevier Publishing, pp. 3895‐3980.
Throughout history and in every part of the world, innovation in agriculture has played crucial roles in economic development by increasing farm productivity, enhancing the incomes of poor farmers and making food ever-more abundant and cheaper for consumers, while reducing the demands placed on natural resource stocks. Nevertheless, governments and markets consistently fail to do enough of the right kinds of R&D (research and development)—at least if we are to believe the evidence on rates of return to research—and technological choices on farms are becoming ever-more constrained. To begin, this chapter reviews the broad landscape of the economics of innovation and technical change in agriculture and the implications for farm inputs, outputs, productivity growth, and the structure of agriculture. Following a review of investments in R&D, we broach issues associated with assessing the returns to agricultural research and the determinants of the distribution of benefits. We reflect on the role of certain modeling assumptions as they influence results in research evaluation studies and findings in political economy models seeking to account for investments in R&D. This sets the stage for a discussion of technological regulation and its implications for agricultural innovation. Whether through government intervention or the actions of influential market intermediaries, ever-tighter restrictions are being imposed on the technologies that may be used on farms and throughout the food chain. These trends are both constraining the potential for innovation on farms as well as beyond the farm gate and inducing demand for new, more acceptable technologies.
Payoffs to A Half Century of CGIAR Research
Alston, J.M., P.G. Pardey, and X. Rao. 2021. Payoffs to a Half Century of CGIAR Research. American Journal of Agricultural Economics 104(2):502-529.
The CGIAR is a unique and highly successful institutional arrangement for funding and conducting multilateral agricultural R&D. Established in 1971, the CGIAR has spent about $60 billion in present value terms mainly on R&D for staple food crops to support the world's poor. In this study, we provide a quantitative assessment of the past payoffs to CGIAR research. We compiled a comprehensive set of all known studies reporting estimates of returns to CGIAR research and to public research undertaken by low- and middle-income countries. We transformed these rate of return estimates into standardized benefit–cost ratios (BCRs), and we conducted a statistical meta-analysis. As a robustness check, we also undertook two complementary assessments. These comprised a selective review of nine (“billion-dollar”) studies reporting large-scale benefits to CGIAR investments and an approximation approach based on an attribution of total factor productivity growth. The results are remarkably similar across the methods. All the evidence points to an overall BCR on the order of 10:1 across the portfolio for past CGIAR research investments.