Rural Public Infrastructure and Agricultural Development under the “Manufacturing Supporting Agriculture” Policy in Developing Countries

Abstract

This paper systematically examines the repercussions of rural development facilitated by the implementation of the "manufacturing supporting agriculture" policy. The financial resources for public infrastructure development in rural areas are sourced exclusively from the manufacturing sector. The study deduces that an augmentation in the unit supporting fund correlates with a diminished urban unemployment ratio and the advancement of rural development. Moreover, if the impact of public infrastructure on agricultural output is substantial, the manufacturing sector need not necessarily experience a decline in output when the government enacts this policy. Additionally, the study determines that the optimal level of the unit supporting fund is greater (or smaller) compared to an open economy scenario when the influence of price changes on national income is positive (or negative).