Factors influencing the declining contribution of the agricultural sector to the overall growth of the Greek economy, 1950-1990

Abstract

The issue of (sectoral) contribution to growth is usually handled in the literature with some type of
growth-accounting decomposition. The "state of the art" was established by Abramovitz (1956) and
Denison (1967). Since then the literature has diversified considerably. The present paper uses this conventional
growth accounting framework to explain the declining importance of the agricultural sector in the
Greek economy. Agricultural sector contributions to overall growth are investigated using time series
data for the period 1950-1990. The results reveal that capital accumulation, export contribution and
import penetration along with the effects of "appropriationism" and "substitionism" are significant variables
in explaining the declining importance of agricultural activity. In addition, the Common Agricultural
Policy (CAP) and since 1986 the pressures for international liberalization of the agricultural product
markets, have been leading to the further contraction of the agricultural activities.