Phase 1, INTERPAKS, Both research in agricultural technology and construction of land infrastructure are characterized by indivisibility, externality, and jointness in supply and utilization. The theory of public good economics of the Samuelson-Musgrave tradition tells us that the goods and services with such attributes cannot be supplied at socially optimum levels if the supply is left to private firms within a competitive market mechanism. Public investments are required to correct for such market failure. The need for public institutions to conduct adaptive research and to build and coordinate the use of irrigation systems is especially critical in Asian agriculture, where the possibility for farm producers to conduct such activities by themselves is limited. In this article, the author attempts to demonstrate the critical importance of adaptive research and land infrastructure investment in the process of diffusion of agricultural technology, drawing on the history of rice technology development in Japan, Taiwan, and Korea, in contrast to the more recent development of rice technology in South and Southeast Asia, which has been heralded as the "green revolution". He attempts to identify what institutions have to be evolved for satisfying the basic requirements for technology diffusion in agriculture, and to infer what forces were responsible for inducing such institutional evolution.
