input promotion within a complex subsector fertilizer in nigeria despite growing evidence that fertilizers can substantially increase yields and slow down environmental degradation in sub saharan africa ssa the region still lags far behind other developing areas in fertilizer use low use rates persist despite numerous efforts to ease farmers access to quality and affordable fertilizer this article reviews the effects of nigeria s fertilizer policies including fertilizer subsidies on fertilizer use we also compare the old government led fertilizer subsidy scheme with the more recent voucher based programs and their potential effects on private fertilizer sector development based on our analysis of nigeria s experience with fertilizer subsidies we identify the potential major challenges to be faced by the new fertilizer subsidy scheme currently being implemented nationwide

you can t save alone commitment in rotating savings and credit associations in kenya abstract this article examines one reason why individuals develop and maintain local level financial savings organizations known as rotating savings and credit organizations or roscas economic theories suggest that individuals form roscas to finance the purchase of a lumpy durable good in response to intrahousehold conflict over savings or to provide themselves with insurance the article proposes an additional hypothesis for rosca participation saving requires discipline and some roscas may be formed to provide a collective mechanism for commitment in the presence of time inconsistent preferences data from 70 roscas located in western kenya indicate that the commitment hypothesis is plausible and broadly consistent with the design and patterns of participation in these roscas as many rosca participants put it you can t save alone

multidimensional mechanism design for auctions with externalities abstract in an auction with externalities a buyer s type is multidimensional and specifies the payoff he would get for each of the n 1 possible outcomes the seller keeps the object or buyer i i 1 n gets the object we provide a characterization of multidimensional incentive compatible mechanisms similar to that for one dimensional mechanisms although reservation utilities are endogenous and type dependent the participation constraint is binding for only one critical type a main difficulty in a multidimensional setting is the integrability condition we present a geometric characterization for discontinuous conservative vector fields in auctions where the buyers submit scalar bids and the seller transfers the object to one of the buyers for sure a second price auction maximizes revenue with two buyers this auction remains optimal even if the seller can set a reservation price journal of economic literature classification numbers c7 c72

impact of off farm income on food security and nutrition in nigeria abstract while the poverty implications of off farm income have been analyzed in different developing countries much less is known about the impact of off farm income on household food security and nutrition here this research gap is addressed by using farm survey data from nigeria econometric analyses are employed to examine the mechanisms through which off farm income affects household calorie and micronutrient supply dietary quality and child anthropometry we find that off farm income has a positive net effect on food security and nutrition the prevalence of child stunting underweight and wasting is lower in households with off farm income than in households without using a structural model we also show that off farm income contributes to higher food production and farm income by easing capital constraints thus improving household welfare in multiple ways

taking account of governance implications for land use dynamics food prices and trade patterns deforestation mainly caused by unsustainable agricultural expansion results in a loss of biodiversity and an increase in greenhouse gas emissions as well as impinges on local livelihoods countries governance performance particularly with respect to property rights security exerts significant impacts on land use patterns by affecting agricultural yield related technological investment and cropland expansion this study aims to incorporate governance factors into a recursive agro economic dynamic model to simulate governance impacts on land use patterns at the global scale due to the difficulties of including governance indicators directly into numerical models we use lending interest rates as discount rates to reflect risk accounting factors associated with different governance scenarios in addition to a reference scenario three scenarios with high low and mixed divergent discount rates are formed to represent weak strong and fragmented governance we find that weak governance leads to slower yield growth increased cropland expansion and associated deforestation mainly in latin america sub saharan africa south asia and southeast asia this is associated with increasing food prices particularly in sub saharan africa and southeast asia by contrast strong governance performance provides a stable political and economic situation which may bring down deforestation rates stimulate investment in agricultural technologies and induce fairly strong decreases in food prices

introduction imperfect information and rural credit markets puzzles and policy perspectives rural credit markets have been at the center of policy intervention in developing countries over the past forty years many governments supported by multilateral and bilateral aid agencies have devoted considerable resources to supplying cheap credit to farmers in a myriad of institutional settings the results of many of these interventions have been disappointing and one explanation for this must be that they were based on an inadequate understanding of the workings of rural credit markets the articles in this symposium issue are devoted to empirical and theoretical investigations of rural credit markets in the framework of the imperfect information paradigm the authors show how this framework is useful not only in explaining puzzling features of these markets but also in providing a policy perspective to assess the successes and failures of specific interventions

farm household production efficiency evidence from the gambia this article investigates the economic efficiency of farm households with an application to the gambia the efficiency analysis is conducted not at the farm level but at the household level thus capturing the importance of off farm activities output based measures of technical allocative and scale efficiency are generated using nonparametric measurements an econometric analysis of factors affecting the efficiency indexes is then conducted using a tobit model technical efficiency is fairly high indicating that access to technology is not a severe constraint for most farm households the cost of scale inefficiency is modest allocative inefficiency by contrast is found to be important for the majority of farm households on the basis of the tobit results imperfections in markets for financial capital and nonfarm employment contribute to significant allocative inefficiency

a comparison of determinants of urban rural and farm poverty in costa rica abstract the lack of progress on reducing poverty in third world countries and its growth during the 1980s show that one of the fundamental goals of development has not been met addressing the renewed concern with poverty requires knowledge about the factors affecting poverty this paper uses logistic regression analysis to estimate the effects of variables on urban rural farm and nonfarm poverty among households in costa rica results show the complexity of the issue and imply policies to expand education through the secondary level to create more opportunities for rural off farm employ

deforestation and the rule of law in a cross section of countries relationships between deforestation and population pressure income growth and insecure property rights are examined with data from 120 countries insecure property rights are hypothesized to arise from two sources government instability or inability to enforce ownership and an absence of government accountability the former source is captured by measures of general lawlessness such as guerrilla warfare revolution and frequent constitutional change the latter is proxied by variables indicating the type of government executive frequency of political purges and the existence of an elected legislature general support is indicated for the property rights hypothesis and for the effects of population growth

financial inclusion and financial integrity aligned incentives summary the financial action task force embraces financial inclusion as complementary to anti money laundering and counter terrorist financing as it enhances transparency this support is based on the premise that the increased use of formal financial services leads to a reduction of usage of informal services we present evidence on eight african countries that both are not negatively associated moreover informal employment and cash preference reduce the inclination to use mobile financial services if an increase in transparency acts as disincentive to use formal services the alignment of financial inclusion and integrity will fail

the role of nonfarm income in coping with the effects of drought in southern mozambique to reduce their dependence on subsistence agriculture farm households in rural africa may diversify their income sources by participating in the nonfarm sector in years of drought nonfarm income can also be part of the coping strategies a multivariate sample selection model was used to analyze three years of data from a nationally representative household survey in mozambique the analysis was guided by the following three questions during a drought year 1 do households increase their participation in nonfarm activities 2 are poorer households as likely as others to participate in and benefit from nonfarm activities and 3 which factors are associated with higher nonfarm incomes the results suggest that households are more likely to engage in at least one nonfarm income generating activity during a drought year although poorer households are more likely to engage in nonfarm activities they are less likely to participate in nonfarm activities of high return the results suggest that policies reducing entry barriers e g improved road infrastructure micro credit schemes and livestock promotion programs and increasing education levels can facilitate income diversification thus allowing rural households to better cope with the effects of drought when designing polices care must be taken to avoid exacerbating income inequality by targeting measures toward poorer and female headed households

how not to sell nuclear weapons we consider situations where a sale affects the ensuing interaction between potential buyers these situations are modeled by assuming that an agent who does not acquire the object for sale incurs an identity dependent externality we construct a revenue maximizing auction for the seller we observe that 1 outside options and participation constraints are endogenous 2 the seller extracts surplus also from agents who do not obtain the auctioned object 3 the seller is better off by not selling at all while obtaining some payments if externalities are much larger than valuations

agricultural household models extensions applications and policy this book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far the model assumes that households are price takers and is therefore recursive the decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor comparative results on selected elasticities are presented for a number of economies the empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive the book summarizes the implications of agricultural pricing policy for the welfare of farm households marketed surplus the demand for nonagricultural goods and services the rural labor market budget revenues and foreign exchange earnings in addition it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition nutritional status health saving and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings methodological topics primarily the data requirements of the basic model and its extensions along with aggregation market interaction uncertainty and market imperfections are discussed the most important methodological issues the question of the recursive property of these models is also discussed

mechanization and agricultural technology evolution agricultural intensification in sub saharan africa typology of agricultural mechanization in nigeria in sub sahara african ssa countries like nigeria anecdotal evidence indicates that the cost of manual farming activities has been rising with potential causes including the growing urban sector as well as rural non farm economies oseni and winters 2009 which often raises rural farming wages reardon et al 2000 while rising rural wages may help some farmers benefit through increased off farm income earning activities farmers getting higher returns from farming than non farm activities may lose from higher labor costs when high labor costs have negative effects on agricultural productivity and the welfare of smallholder farm households effective support for mechanization may be critical demand for mechanization may be determined by various factors including

rural nonfarm activities and agricultural crop production in nigeria although most rural households are involved in the farm sector the nonfarm sector has grown significantly in recent decades and its role in rural development has become increasingly important this article examines the effect of participation in nonfarm activities on crop expenses of farm households in nigeria the relationship is modeled using a nonseparable agricultural household model that suggests that participating in nonfarm activities can relax the credit constraints facing farm households and reduce risk thereby helping households improve farm production and smooth consumption over time the results show that participation in nonfarm activities by nigerian farmers has a positive and significant effect on crop expenses and in particular on payments for hired labor and inorganic fertilizers separate analysis of the six geopolitical zones in nigeria indicates that it is in the south south and south east zones where nonfarm participation appears to induce more hiring of labor the results support the hypothesis that nonfarm participation helps relax liquidity constraints but suggests how that liquidity is used is zone specific in general the results also indicate that liquidity is used more to pay for inputs into staple production as opposed to cash crops

access to capital and its impact on agrarian structure and productivity in kenya access to capital and its distribution across agents can profoundly shape the structure and performance of an agrarian market economy it is conceptually useful to distinguish between ex ante and ex post capital access ex ante capital access denotes the ability of agents to finance production costs e g labor and purchased inputs costs which must be paid ex ante that is prior to the actual realization of production ex post capital access that is access to capital after the realization of the production process is of particular importance as an insurance substitute in low income agrarian economies where contingency markets are imperfect buoyant ex post capital access would permit an individual to stabilize consumption year to year even as production fluctuates annually a number of theoretical models have ex

household consumption smoothing through ethnic ties evidence from cote d ivoire abstract this paper investigates the hypothesis that households in cote d ivoire take part in spatially diversified risk sharing arrangements with members of their own ethnic group empirical tests are presented using several estimation methods to deal with heteroscedasticity measurement error and extreme value problems to examine whether results are robust across estimation procedures the hypothesis of complete risk sharing within ethnic groups is rejected however there appears to be some partial insurance performed by individual households with other members of the same ethnic group particularly for the households residing in the regions least likely to have access to formal financial arrangements

partial pooling at the reserve price in auctions with resale opportunities abstract two features common to many auctions are the use of reserve prices and the existence of secondary markets for the goods being sold even in simple symmetric settings the combination of these features can preclude existence of an equilibrium in symmetric separating bidding strategies with a reserve price sufficiently far below the maximum endogenous valuation a symmetric equilibrium still exists but with some types pooling at the reserve the optimal reserve price depends not only on the joint distribution of bidders information before and after the auction but also on how surplus is divided in the secondary market journal of economic literature classification numbers d44 c7 l1 d82

farm productivity in burkina faso effects of animal traction and nonfarm income the purpose of this invited paper is to stimulate at the micro meso and macro levels debate on positive analytical approaches to agricultural productivity the session focuses on africa because it is the only developing region where crop output and yield growth is lagging seriously behind population growth the present paper treats the micro farmhousehold level macro and meso analyses are useful for tracing productivity effects of policy and infrastructure change employing broad samples over long periods micro analyses tend to track smaller samples over shorter periods but dig below the aggregate surface to discern and explain productivity differences over crops zones and farmer groups micro analysis is useful for policy and technology formulation and for infrastructure and commodity promotion strategies further many aggregate studies are limited to only a few composite product categories because of lack of more detailed data on labor land and capital allocations over crops to obtain finer distinctions among crops one needs detailed farm management surveys since the spate of african farm management studies in the 1960s and 1970s soils have rapidly degraded access to land has become increasingly constrained factor and credit markets have changed structurally and nonfarm activity by farm households has apparently increased these changes should affect productivity across farm types suggesting the need to revive attention to farm level analysis past farm level productivity work in africa which largely used positive analysis tended to stratify the sample exogenously based on farm characteristics generally by farm size use of animal traction access to credit use of new seed varieties land tenure status or income we follow these earlier studies by stratifying the farm household data by a factor we expect to affect technical parameters namely farm capital in the guinean zone of burkina faso in particular we stratify according to whether the household owns animal traction equipment foll wing barrett et al and jaeger and matlon besides adding to empirical evidence on the productivity effects of animal traction we endogenously stratify the sample with a selectivity model an approach too rarely taken with a few recent exceptions such as carter in productivity research we then estimate production functions controlling for selectivity bias such an approach also allows us to test the indirect effect of nonfarm income on productivity through its effect on technology adoption as embodied in farm capital acquisition studies of nonfarm income effects on capital acquisition are not absent in the literature e g barrett et al in eastern burkina but they have been somewhat neglected in farm level work and neglected even more in aggregate level research because of the rarity of rural nonfarm income data

labor shortages on small landholdings in malawi implications for policy reforms abstract a simple linear programming model of representative smallholder households is used to investigate the sources of relative scarcity of labor and land in malawi the paradox of on farm labor shortages on small landholdings can be explained by the multiple constraints smallholders face these multiple constraints including lack of finance concerns for food security and others lead to suboptimal allocations of household resources in turn the low returns to labor and land contribute to household food insecurity and a vicious cycle of poverty the findings of the paper provide a clear signal to policymakers and research and extension institutions that these constraints are all linked and addressing one cannot be effective without addressing the others

modelling embedded risk in peasant agriculture methodological insights from northern malawi abstract using a linear programming model of farming systems in northern malawi the conditions under which peasant farm household models may need to allow for embedded risk are investigated tactical sequential responses to uncertainty are found to be more important to labour scarce households with limited access to capital and to credit markets compared with semi sequential programming discrete stochastic programming dsp provided more efficient solutions for problems involving embedded risk there may be intuitive advantages in presenting results from dsp models in terms of a semi sequential strategy

roscas in urban ethiopia are the characteristics of the institutions more important than those of members abstract using household data from urban ethiopia we provide an empirical test of the economic theory of rotating savings and credit associations roscas and identify the impact of roscas and member characteristics on participation and volume of saving unlike other studies we account for the endogeneity of all rosca variables muslims individuals who live in richer households the self employed private sector employees and households with large numbers of women are more likely to join roscas a robust finding is that the savings are significantly affected by the characteristics of the members but not that of the informal saving institution some policy implications are discussed

designing a private industry government auctions with endogenous market structure abstract this paper considers government mechanisms for auctioning production rights in which both the winners and the market structure doupoly dual sourcing monopoly sole sourcing or government owned production are a function of the bids in designing the optimal mechanism the government considers the tradeoffs among consumer surplus producer surplus and revenue under incomplete information doupoly is implemented less frequently and government production more frequently than under complete information when bidders are symmetric the optimal mechanism can be implemented as a modified second price auction applications to privatization deregulation and defense procurement are discussed

mobile money agricultural marketing and off farm income in uganda mobile money mm services can contribute to welfare gains in smallholder farm households previous research showed that one important pathway for these mm related welfare gains is through higher remittances received from relatives and friends here the role of other impact pathways is examined especially focusing on agricultural marketing and off farm economic activities the analysis builds on panel data from smallholder coffee farmers in uganda regression models show that the adoption of mm technology has contributed to higher household incomes and consumption levels off farm income gains are identified to be an important pathway also beyond remittances typical off farm income sources are small businesses in trade transport and handicrafts which benefit from novel savings and money transfer opportunities through mm in terms of agricultural marketing mm users sell a larger proportion of their coffee as shelled beans to buyers in high value markets instead of selling to local traders immediately after harvest mm services help to reduce cash constraints and facilitate transactions with buyers from outside local regions in conclusion mm can contribute to rural development through various important pathways analysis of adoption patterns suggests that mm services are socially inclusive

access to capital in rural thailand an estimated model of formal versus informal credit the aim of this paper is to understand the mechanism underlying access to credit the author focuses on two important aspects of rural credit markets in thailand first moneylenders and other informal lenders coexist with formal lending institutions such as government or commercial banks and more recently micro lending institutions second potential borrowers presumably face sizable transaction costs obtaining external credit the author develops and estimates a model based on limited enforcement and transaction costs that provides a unified view of those facts the results show that the limited ability of banks to enforce contracts more than transaction costs is crucial in understanding the observed diversity of lenders

the role of informal finance in household capital accumulation evidence from taiwan economies that experience rapid growth also experience major changes in their consumption patterns particularly for consumer durables this paper studies the diffusion of durables in taiwan between 1977 and 1991 we focus on the link between household accumulation of durables and participation in informal financial institutions while growth in per capita income in taiwan had been great many households still reply on traditional forms of finance we test the idea that rotating savings and credit associations which are found worldwide exist to lower the cost of saving for durables our analysis finds evidence of that link

impacts of subsidized hybrid seed on indicators of economic well being among smallholder maize growers in zambia we test the hypotheses that subsidies on hybrid seed change maize production total household income the severity of poverty and relative deprivation among smallholder maize growers in zambia the analysis contributes to the literature by measuring the quantitative effects of seed as compared to fertilizer subsidies on indicators of household well being rather than input demand we apply a combination of econometric approaches to a nationally representative balanced panel of smallholder maize growing households and invoke the chain rule to generate quantitative estimates of impacts per kilogram of subsidized seed our findings demonstrate that in the initial years of the program subsidized seed enhanced the well being of smallholder maize growers according to each indicator but by small magnitudes simple calculations suggest high private and social benefit cost ratios when benefits are measured in terms of household income although magnitudes are sensitive to seed price and administrative costs

farm size and productivity in malawian smallholder agriculture this article contributes to the limited literature on farm size and productivity in smallholder agriculture in sub saharan africa farm survey data and the results from a linear programming farm household model provide evidence for a positive relationship between farm size and productivity in both labour scarce and land scarce smallholder farming in malawi during the 1980 s the absence of an inverse relationship is explained in terms of failures in land capital and produce markets with acute capital constraints which affect both capital and labour inputs on smaller farms implications for rural development policies are discussed

seeking guidelines for poverty reduction in rural zambia abstract poverty profiles typically provide policy makers with information about the characteristics of the poor without giving guidance as to the types of programs best suited for reducing poverty a method is described in this paper for extending the typical poverty profile to analyze and quantify the constraints faced by poor smallholders in rural areas the method is applied to rural zambia where poverty is widespread and deep the extension provides timely information for the design of poverty reducing policies

wage and employment effects of malawi s fertilizer subsidy program this article uses three waves of nationally representative household level panel data from malawi to estimate how a large scale fertilizer subsidy program impacts the agricultural labor market known as ganyu in that country i find that when looking across the entire population of smallholders receiving an additional 100 kg of subsidized fertilizer causes the average household to supply about three fewer days of ganyu the fertilizer subsidy program also has a small positive effect on the probability that a household demands agricultural labor with the results approaching statistical significance in addition a 10 kg increase in the average amount of subsidized fertilizer acquired per household in a community boosts the median agricultural wage rate by 1 4 in that community the increase in wage rates translates to a us 1 40 per year increase in average household income in the years after malawi s subsidy program was scaled up and a us 1 86 per year increase in average household income for those who sold their labor before the subsidy program was scaled up this finding suggests that households who sell their labor off farm may experience some small spillover benefit from the program in the form of higher agricultural wage rates

selling licences for a process innovation the impact of the product market on the selling mechanism this article considers the sale by a research lab of licences for a cost reducing innovation the marginal cost of a firm that wins a licence is private information and the acquisition of a licence imposes a negative externality on the other firms the lab s optimal revenue is determined from a class of mechanisms in which the lab selects the number of licences and the reserve price before the sale the role of the downstream product market in the determination of the number of licences is analyzed furthermore it is also shown that the optimal reserve price may be zero jel classification d82 li3

poverty and basic needs fulfilment in africa during structural change evidence from cote d ivoire abstract much attention is given in the literature to the evolution of social indicators during periods of structural adjustment and economic reform this paper argues that these processes are not distribution neutral from the point of view of basic needs fulfilment and that hence the focus should not be on aggregate indicators but on the distribution of beneficiaries of social services and changes in this distribution evidence is presented for cote d ivoire during the second half of the 1980s a period of intense structural change which shows that the poorest absorbed the bulk of the decline in basic needs fulfilment as a result of structural change this was the case for almost all aspects of basic needs and occurred regardless of the overall trend in the social indicators

markets and pro poor agricultural growth insights from livelihood and informal rural economy models in malawi this article presents the development of a set of programming models describing the major features of different rural livelihoods and of the informal rural economy they together make up in malawi the models allow for differentiated responses by different household types to change and for the partial equilibrium effects of consequent supply demand and price adjustments in labor and grain markets the models provide insights into the relations between own farm and nonown farm activities in different households livelihoods and in the informal rural economy as a whole and are used to investigate possible impacts of increasing cash crop prices and of a more open rural economy impacts of these changes on the poor are found to be critically dependent upon supply and demand elasticities in labor and grain markets but the poor could potentially suffer significant losses from increased openness of the local economy leading to increased expenditure by less poor households on imported goods and services

subsidies and crowding out a double hurdle model of fertilizer demand in malawi this article uses a double hurdle model with panel data from malawi to investigate how fertilizer subsidies affect farmer demand for commercial fertilizer the article controls for potential endogeneity caused by the nonrandom targeting of fertilizer subsidy recipients results show that on average 1 additional kilogram of subsidized fertilizer crowds out 0 22 kg of commercial fertilizer but crowding out ranges from 0 18 among the poorest farmers to 0 30 among relatively nonpoor farmers this indicates that targeting fertilizer subsidies to the rural poor is likely to maximize the contribution of the subsidy program to total fertilizer use

contracting with externalities the paper studies inefficiencies arising in contracting between one principal and n agents when the utility of each agent depends on all agents trades with the principal when the principal commits to a set of publicly observable bilateral contract offers the arising inefficiency is due entirely to the externalities imposed on non signers in contrast when the principal s offers are privately observed the distortion is due to the externalities given agents equilibrium trades comparison of the two externalities determines the relative efficiency of the two contracting regimes in both cases we show that when n is large each agent can be treated as non pivotal provided that appropriate continuity assumptions are satisfied we also study the case in which the principal can condition each agent s trade on other agents messages we characterize the set of such mechanisms in which each agent s participation is voluntary when the principal can commit to any such mechanism she implements the first best outcome while threatening each deviator with the harshest possible punishment however in the presence of noise that goes to zero slower than n goes to infinity in the limit we obtain a generally inefficient outcome in which each agent feels non pivotal

optimal pricing mechanisms with unknown demand the standard profit maximizing multi unit auction intersects the submitted demand curve with a preset reservation supply curve which is determined using the distribution from which the buyers valuations are drawn however when this distribution is unknown a preset supply curve cannot maximize monopoly profits the optimal pricing mechanism in this situation sets a price to each buyer on the basis of the demand distribution inferred statistically from other buyers bids the resulting profit converges to the optimal monopoly profit with known demand as the number of buyers goes to infinity and convergence can be substantially faster than with sequential price experimentation

a little at a time the use of regularly scheduled repayments in microfinance programs abstract informal lenders appear to be thriving even in regions where microfinance institutions mfis such as the grameen bank have established lending programs we suggest that an explanation for this well documented observation lies in the ubiquitous use of regularly scheduled repayments by mfis borrowers are typically required to repay their loans in tightly structured installments beginning soon after loan disbursement this little remarked aspect of the repayment schedule is usually explained as inculcating fiscal discipline among borrowers we argue that an alternative rationale for this loan repayment structure lies in the difficulty of monitoring borrowers actions the potential for moral hazard leads mfis to use innovative mechanisms such as regularly scheduled repayments which indirectly coopt the better informed informal lenders conversely this installment repayment structure allows informal lenders to survive further we show that this linkage can not only expand the volume of informal lending but may also raise the interest rate in the informal sector

patent licensing to bertrand competitors abstract a cost reducing process innovation protected by a patent is sold to one of several firms engaged in price competition incomplete information about production costs yields an auction model with both private and common value components our main result is that standard auction mechanisms lead to inefficient allocations this sharply contrasts with the result obtained under complete information the inefficiency result extends to patent race frameworks which resemble all pay auctions an auction where the lowest bidder gets the patent is shown to have several equilibria one of which is efficient

understanding the failure of imf reform the zambian case abstract political resistance to international monetary fund imf reform in developing countries has become a major obstacle to reform implementation the zambian case in which the roots of resistance to reform were present in a developmentalist model long before the arrival of the imf suggests that the current analysis of political will and resistance to interest group pressure needs to be strengthened by a more profound conceptualization of the political economic regime of countries attempting reform when examined in this larger political economic context the zambian case further makes clear the need for support for political as well as economic change during the reform process

links between nonfarm income and farm investment in african households adding the capital market perspective farm household surveys in the 1970s and 1980s showed that nonfarm activities provide an important share of household income contrasting with the conventional image of rural african households as deriving their food entitlement almost exclusively from the land e g matlon collier and lal low reardon et al haggblade hazell and brown much of the literature on nonfarm income has concentrated

adoption of modern varieties farmers welfare and crop biodiversity evidence from uganda abstract this paper assesses the impact of modern varieties adoption on farmers welfare and crop biodiversity conserved in situ using nationally representative data collected in 2009 2010 in uganda an endogenous switching regression model estimates the net economic and environmental effects of switching from local landraces to modern species results show that after controlling for market and agro ecological factors the local varieties perform better than modern ones in marginalized and climatic vulnerable areas crop biodiversity shows to play a fundamental role in farmers risk minimizing strategies when the available modern varieties are not adaptable to the local context and not supported by the required level of agro intensification rural development policies should consider the heterogeneity in the adoption returns and support diversity conservation as a national strategic asset for a suitable bioprospecting and a best fitting agricultural system implementation

payment mechanisms and antipoverty programs evidence from a mobile money cash transfer experiment in niger abstractcash transfers have become an increasingly important component of social protection policies in both developed and developing countries while such programs are often implemented electronically in developed countries in many developing countries with weak financial infrastructure such transfers are distributed manually resulting in significant costs to program recipients and the public sector alike the introduction of mobile money systems in many developing countries offers new opportunities for distributing cash transfers using data from a randomized experiment of a mobile money cash transfer program in niger we find evidence of benefits of this new system household diet diversity was 9 16 higher among households who received mobile transfers and children ate an additional one third of a meal per day these results can be partially attributed to time savings associated with mobile transfers as program recipients spent less time traveling to and waiting for their transfer they are also

food poverty profile applied to kenyan smallholders that can be used to test conflicting hypotheses this paper analyzes data from the first kenyan integrated rural survey irs i household expenditure data collected by the central bureau of statistics to estimate the magnitude distribution of and factors associated with food poverty among kenyan small farmers the analysis uses a new methodology with three improvements over previous empirical studies 1 food poverty is estimated using an additively decomposable measure that allows poverty to be distributed among population subgroups 2 the food poverty line is based on observed dietary preferences in response to regional food prices and 3 the food poverty measure is adjusted to use regional food poverty lines without sacrificing its theoretical properties or decomposability this paper consists of two main parts section ii reviews the methodology underlying the setting of the regional food poverty line on the basis of a detailed integrated rural survey of kenyan smallholders the cost of food consumption corresponding to the recommended dietary allowance rda of calories is computed since this food poverty line was calculated on the basis of the observed diet consumed it presumably reflects the prevailing regional food preferences and prices faced by households consuming around the calorie rda level the next part of section ii presents a food poverty measure that in addition to satisfying the major fundamental properties of such measuresis decomposable and allows regional food poverty deprivation to be estimated

liberalization and privatization in tanzania and zambia abstract poststructural adjustment policies currently being emphasized by the world bank international monetary fund and donors in tropical africa are liberalization and privatization of the economies in theory both of these policies will allow firms to operate more efficiently and the economy to be more competitive and market oriented this paper focuses on the short run effects of these policies how governments are initiating them and what segments of the population are benefiting losing the programs are sufficiently new in tropical africa that the literature contains little analysis a recent visit to tanzania and zambia provides the basis for this review of the experiences in these two countries

effect of off farm income on smallholder commercialization panel evidence from rural households in ethiopia this article investigates how off farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in ethiopia a double hurdle model is estimated using three waves of panel data from the ethiopian rural household survey unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach the results show that off farm income has no significant influence on household crop output market participation however conditional on market participation additional off farm earnings negatively affect the marketed surplus this indicates that farmers use off farm earnings for consumption rather than for investment in agricultural production policy measures that promote rural investment may help increase returns to labor for land poor households participating in off farm work in the process of agricultural commercialization

agricultural input credit in sub saharan africa telling myth from facts recent evidence shows that many sub saharan african farmers use modern inputs but there is limited information on how these inputs are financed we use recent nationally representative data from four countries to explore input financing and the role of credit therein a number of our results contradict conventional wisdom found in the literature our results consistently show that traditional credit use formal or informal is extremely low across credit type country crop and farm size categories instead farmers primarily finance modern input purchases with cash from nonfarm activities and crop sales tied output labor arrangements which have received little empirical treatment in the literature appear to be the only form of credit relatively widely used for farming

implications of non farm work to vulnerability to food poverty recent evidence from northern ghana summary using survey data from northern ghana this study seeks to establish the impact of participation in non farm work on the vulnerability of resource poor households to food poverty vulnerability to food poverty is assessed based on expected future food expenditure of households the potential endogeneity problem associated with participation in non farm work by households is overcome using a novel instrumental variable approach analysis of the determinants of expected future food expenditure is done using a standard feasible generalized least squares fgls method demographic and socioeconomic variables location variables and household facilities are included in the model as control variables our study finds that participation in non farm work significantly increased the future expected food consumption thereby alleviating the vulnerability of households to food poverty our study also confirms that current food poverty and future food poverty i e vulnerability to food poverty are not independent from each other non farm work plays a crucial role in providing the means to overcome the risk of food poverty in these resource poor households policies that promote off farm income generating activities such as small businesses and self employment as well as the creation and support of businesses that absorb extra labor from the farm should be encouraged in the study region because households in the study region are exposed to above average levels of hunger and food poverty the study recommends the government of ghana and development partners to take measures that enhance the resilience of these resource poor households

the relationship between credit and productivity in chinese agriculture a microeconomic model of disequilibrium credit is an important element in agricultural production systems it allows producers to satisfy the cash needs induced by the production cycle which characterizes agriculture preparation planting cultivation and harvesting of the crops are typically done over a period of several months in which very little cash revenue is earned while expenditures on materials purchased inputs and consumption must be made in cash cash income is received a short time after the harvest in the absence of credit markets farmers would have to maintain cash reserves so as to facilitate production and consumption in the next cycle the availability of credit allows both greater consumption and greater purchased input use and thus increases welfare of the farmers

bidding for the future signaling in auctions with an aftermarket abstract this paper considers auctions where bidders compete for an advantage in future strategic interactions when bidders wish to exaggerate their private information equilibrium bidding functions are biased upwards as bidders attempt to signal via the winning bid signaling is most prominent in second price auctions where equilibrium bids are above value in english and first price auctions signaling is less extreme since the winner incurs the cost of her signaling choice the opportunity to signal lowers bidders payoffs and raises revenue when bidders understate their private information separating equilibria need not exist and the auction may not be efficient

the impact of formal financial inclusion on informal financial intermediation and cash preference evidence from africa this paper examines the effect of formal financial intermediation inclusion on informal financial intermediation and the use of cash for economic activities using data from the global findex 201

participation in rural land rental markets in sub saharan africa who benefits and by how much evidence from malawi and zambia we use nationally representative household level panel survey data in two neighboring countries in southern africa zambia and malawi to characterize the current status of rural land rental market participation by smallholder farmers and their subsequent welfare impacts rural rental market participation is much higher in densely populated malawi than in lower density zambia reflecting the role of land scarcity in driving rental market development consistent with previous literature we find evidence that rental markets contribute to efficiency gains within the smallholder sector by facilitating the transfer of land from less able to more able producers on average in both countries furthermore we find that rental markets serve to re allocate land from relatively land rich to land poor households we examine the impacts of participation on a number of welfare outcomes and find evidence for generally positive returns to renting in land in both countries on average however our analysis also indicates that the returns to renting in land vary strongly with scale of production tenants who produce more have larger returns to renting in and many of the smaller producers who rent in do so at an economic loss the impacts of renting out i e participating in markets as landlords are decidedly more mixed with overall negative returns to landlords in malawi and negligible returns to landlords in zambia the findings in this article highlight the need for researchers and policymakers in sub saharan africa to stay attuned to how land rental market participation and its impacts evolve in the near future

effect of seasonal food shortage on agricultural production in zambia abstract this paper examines the role of household food stocks in influencing patterns of seasonal labor demand by small farmers in chipata district of zambia and in shaping their production profile more generally the seasonal pattern of stock drawdown is linked with those for food consumption nutrition and labor input in this unimodal agricultural cycle it is found that low levels of food stocks in the post harvest period and their availability during the heavy work period in the rainy season can reduce the area planted as well as the use of non household agricultural labor by households the significance of food as wage good possibly as a result of public policies that have reduced the growth of rural food markets is also a factor in this process it is argued that small farmers with low food stocks may be unable to adopt labor intensive agricultural technologies unless they can increase their effective demand for labor possibly through dry season food for work programs or consumption credit schemes

rural livelihoods and poverty reduction strategies in four african countries this paper compares and contrasts rural livelihoods in uganda kenya tanzania and malawi with a view to informing rural poverty reduction policies within poverty reduction strategy plans prsps low household incomes in rural areas of all countries are associated with low land and livestock holdings high reliance on food crop agriculture and low monetisation of the rural economy these adverse factors are in some instances made more difficult by land sub division at inheritance declining civil security in rural areas deteriorating access to proper agronomic advice and inputs and predatory taxation by decentralised district councils better off households are distinguished by virtuous spirals of accumulation typically involving diverse livestock ownership engagement in non farm self employment and diversity of on farm and non farm income sources lessons for prsps centre on the creation of a facilitating rather than blocking public sector environment for the multiplication of non farm enterprises seeking creative solutions to the spread of technical advice to farmers and examining critically the necessity for and impact of tax revenue collection by district councils on rural incomes and enterprise

smallholder participation in vegetable exports and age disaggregated labor allocation in northern tanzania modern agricultural supply chains have been playing an increasingly important role in developing countries and have had significant effects on rural labor markets this article analyses the effects of smallholder farmer participation in export vegetable supply chains in northern tanzania on both household hired labor demand and off farm labor supply using an age disaggregated approach in our sample neither separability nor exogeneity of smallholder farmer participation in export supply chains can be rejected hence we apply lognormal double hurdle models and find that participation in export supply chains positively affects households decision to hire labor from all age groups we also find that it increases the unconditional overall level of hired labor demand while the age disaggregated analysis shows that these effects mostly benefit rural youth however our sample does not allow us to establish statistically significant evidence of an effect on household off farm labor supply although the point estimates point to nonnegligible positive effect sizes

the design of an efficient private industry government sponsored auctions for production rights e g license auctions privatizations etc shape the industry structure are there mechanisms that induce an efficient industry structure at least when there are no positive costs to public funds the answer is no whenever firms have private information about both fixed and marginal costs our analysis also suggests that the second best industry may either be more competitive or more monopolistic than the first best one these insights are in sharp contrast with the ones obtained for models where firms have one dimensional private information thus requiring more delicate policy recommendations jel d43 d45 d82 l1

banking services for everyone barriers to bank access and use around the world using information from 193 banks in 58 countries the authors develop and analyze indicators of physical access affordability and eligibility barriers to deposit loan and payment services they find substantial cross country variation in barriers to banking and show that in many countries these barriers can potentially exclude a significant share of the population from using banking services correlations with bank and country level variables show that bank size and the availability of physical infrastructure are the most robust predictors of barriers further the authors find evidence that in more competitive open and transparent economies and in countries with better contractual and informational frameworks banks impose lower barriers finally though foreign banks seem to charge higher fees than other banks in foreign dominated banking systems fees are lower and it is easier to open bank accounts and to apply for loans on the other hand in systems that are predominantly government owned customers pay lower fees but also face greater restrictions in terms of where to apply for loans and how long it takes to have applications processed these findings have important implications for policy reforms to broaden access

downstream research joint venture with upstream market power in a vertically related industry we examine the downstream firms incentives to invest in cost reducing research and development r d and to form a research joint venture rjv under two alternative structures of input supply exclusive vertical relations and a single supplier in contrast to the hold up argument in which downstream firms invest non cooperatively and spillovers are low r d investments are higher under a single supplier than under competing vertical chains downstream firms incentives to form a rjv are also stronger in the former case than they are in the latter we identify conditions under which an rjv is beneficial for society integrated innovation and competition policies are also discussed

moneylenders and bankers price increasing subsidies in a monopolistically competitive market abstract in many areas of the world a significant part of the cost of obtaining a good or service is the cost of enforcing the contracts entailed in its provision we present models of markets with endogenous enforcement costs motivated by studies of rural credit markets we show that subsidies may have perverse effects under monopolistic competition increasing prices or inducing exit higher prices interest rates result from the loss of scale economies or from negative externalities among suppliers the models are consistent with the puzzling evidence that infusions of government subsidized formal credit have not improved the terms offered by moneylenders

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

bidding for a process innovation under alternative modes of competition abstract this paper examines whether a first price sealed bid auction is efficient in allocating a process innovation amongst oligopolists engaged in either cournot or bertrand competition standard bidding behavior is modified by the incentive to signal private information in order to influence the oligopoly outcome it is shown that for cournot there exists a unique equilibrium in strictly increasing strategies that is symmetric and therefore allocatively efficient for bertrand an efficient equilibrium may not exist however efficiency is restored as the market becomes perfectly competitive the results underline the sensitivity of efficient auction design to downstream market structures

following up on smallholder farmers and supermarkets in kenya in many developing countries supermarkets are expanding rapidly this affects farmers marketing options previous studies have analyzed welfare effects of smallholder participation in supermarket channels from a static perspective using cross section data we develop a conceptual framework and use panel data to better understand participation and impact dynamics the analysis focuses on vegetable producers in kenya participation in supermarket channels is associated with income gains however many farmers have dropped out of the supermarket channel due to various constraints the initial income gains cannot be sustained when returning to the traditional market organizational support may be needed to avoid widening income disparities

rural nonfarm employment and farming household level linkages this article introduces the articles in agricultural economics vol 40 no 2 march 2009 first we introduce their objectives in a brief review of existing literature on developing country trends in rural income diversification in particular rural nonfarm employment rnfe and its impact on farm technology choice in crops and livestock and thus on agricultural modernization and diversification then we preview the key points of the articles which use distinctive primary datasets from albania bulgaria china india mexico nigeria the philippines senegal and vietnam to document the impacts of rnfe and their implications for farm technology and farm activity

non farm activity household expenditure and poverty reduction in rural vietnam 2002 2008 summary diversifying into non farm activities has been suggested as an effective way out of poverty for rural households in developing countries using the vietnamese household living standards surveys of 2002 2004 2006 and 2008 we test this claim and investigate the effect of non farm sector involvement on poverty and expenditure growth our endogeneity corrected estimates show that an additional household member involved with non farm activity reduces the probability of poverty by 7 12 and increases the household expenditure by 14 over a two year period our findings also indicate that non farm involvement reduces the hours worked on farm but not the household agricultural income

microfinance in africa is it either the problem or the solution abstract this article is based on research undertaken on microenterprises in the informal sector in kenya malawi and ghana it seeks to provoke critical reflection on the uncritical enthusiasm that lies behind much proselytizing of microfinance for informal sector microenterprise it questions whether the extensive donor interest in microenterprise finance really addresses the problems of microentrepreneurs or whether it offers the illusion of a quick fix it suggests that the real problems are more profound and cannot be tackled solely by capital injections but require fundamental structural changes of the socioeconomic conditions that define informal sector activity and a fuller understanding of the psyche of informal sector entrepreneurs

household strategies and rural livelihood diversification this article reviews the recent literature on diversification as a livelihood strategy of rural households in developing countries with particular reference to sub saharan africa livelihood diversification is defined as the process by which rural families construct a diverse portfolio of activities and social support capabilities in order to survive and to improve their standards of living the determinants and effects of diversification in the areas of poverty income distribution farm output and gender are examined some policy inferences are summarised the conclusion is reached that removal of constraints to and expansion of opportunities for diversification are desirable policy objectives because they give individuals and households more capabilities to improve livelihood security and to raise living standards

understanding the coexistence of formal and informal credit markets in piura peru summary this paper examines why farm households seek informal loans in piura peru where formal lenders offer loans at lower interest rates a panel data econometric analysis reveals that the informal sector serves various types of clients households excluded from the formal sector but also households that prefer informal loans because of lower transaction costs or lower risk an in depth examination of contract terms and loan technologies permits an accurate comparison of effective loan costs and contractual risk across sectors and reveals that proximity and economies of scope enjoyed by informal lenders enable them to substitute information intensive screening and monitoring for contractual risk and supply these various types of clients

what s so spatial about diversification in nigeria summary many households in developing countries allocate their productive assets among various income generating activities in order to develop a portfolio of income from occupations with different degrees of risk expected returns and seasonal and liquidity constraints the push and pull factors influencing diversification decisions of households are widely discussed in the literature however no study to date has taken into account spatial interdependence of household decisions in spite of various channels of neighborhood effects such as information flow learning from others social networks and agglomeration economies this paper fills in the gap by incorporating spatial dependence in the choice model of diversification using a spatial auto regressive probit model and an advanced bayesian strategy to its estimation empirical analysis is run taking advantage of the nigerian general household survey panel 2010 11 providing gis coordinates for the surveyed households the results imply endogeneity of the neighbors decisions to allocate their productive assets among various occupations and signal the importance of social learning and agglomeration effects favoring the spillover of diversification activities through neighbors networks and local markets the households decisions respond to local environment factors such as weather shocks or infrastructural constraints as shown by the regional differences taking into account spatial interdependence is particularly important in the event of a wide divide of the data available into different zones as for example in case of the nigerian northern region where the states are larger