[3] This concept of induced innovation and its relationship with technology, institutions and development is further explored in 1978 in an eponymous book co-authored with Vernon Ruttan.
[13] Many of Binswanger's studies of agricultural dynamics are econometric, with early works including e.g. the measurement of elasticities of factor demand and substitution[14] and a microeconomic approach to induced innovation.
[19] By contrast, earlier work of Binswanger and Rosenzweig addresses contractual arrangements, employment and wages in rural labour markets.
[20] Another major contribution of Binswanger's research – together with Klaus Deininger and Gershon Feder – is an analysis of the power relationships governing rental and sales markets for agricultural land in developing countries and their impacts on policy distortions, revolts and reforms.
For instance, he showed that general tax policies, special tax incentives, the rules of land allocation and the agricultural credit system in Brazil all contributed to the acceleration of deforestation of the Amazon rainforest, increasing in the process the size of land holdings and reducing the chances of the poor to become farmers.
Studying South Africa's case, Binswanger and Deininger argue that the dualistic structure of its farm structure – a few very large, highly productive farms often owned by Afrikaner and many relatively small farms owned by native Africans – cannot be explained due to economies of scale in the commercial sector, but is instead due to systematic historical distortions in land allocation, output markets, and access to infrastructure, rural finance and public services;[25] the topic of land reform in South Africa is further explored with regard to policies, markets and mechanisms with Johan van Zyl and Johann Kirsten.
To this, they add the relative cost effectiveness of communal tenure systems, the assessment of titling programms based on efficiency and equity, the potential of land rental markets, the integration of the development of land-sale markets into broader rural development initiatives, the success of decentralized and market-oriented approaches to land reform, and the need for adaptation to local conditions.
[27][28] In a study by Binswanger and Khandker, both argue that the impact of credit expansion on agricultural output in India has been insubstantial, with the programme having a positive return on investment only under very optimistic assumptions.