benefit incidence public spending reforms and the timing of program capture assessments of the distributional effects of public spending reforms have generally been based on average rates of program participation by income or expenditure group this practice can be deceptive because the socioeconomic composition of participants can change as a social program expands or contracts the geographic variation found in 1993 94 household survey data for rural india is used to estimate the marginal odds of participating in schooling and antipoverty programs the results suggest early capture of these programs by the non poor it is shown that conventional methods for assessing benefit incidence underestimate the gains to the poor from higher public outlays and underestimate the losses from cuts

an interest group model of direct income redistribution an interest group model of the determinants of policies which directly re distribute income to low income persons is developed and tested the model assum es that altruistic taxpayers nonaltruistic taxpayers and needy beneficiaries f orm separate interest groups from which politicians seek support benefit levels depend on variables such as taxpayer income and the price of benefits but unlike median voter models the model also implies a role for interest group strengt h and competition between political parties the author uses latent variable met hods and data on the aid to families with dependent children program to demonstr ate empirical support forthe model copyright 1986 by mit press

economies of scale and barriers to entry dixit has recently presented a model in which established firms select capacity to discourage entry but cannot employ threats they would not rationally execute after entry entry deterrence in a slight modification of this model involves the classical limit price output under linear or concave demand however the capital cost of a firm of minimum efficient scale is an upper bound on the present value of the monopoly profit stream that can be shielded from entry it is argued that this suggests the general unimportance of entry barriers erected by scale economies

some examples of dynamic cournot duopoly with inventory this article analyzes a two period game where firms can produce inventory in the first period for sale in the second period we assume that revenues and costs are time invariant and that the firms are symmetric we focus on the nature and the existence of the subgame perfect equilibrium of this model we use examples to show that the nash value functions defined on the joint inventory vector are likely to be ill behaved in particular they need not be concave nor even continuous in the firm s own inventory as a result asymmetric equilibrium is possible when average production costs are falling single firm operation can occur in equilibrium nonexistence is also a distinct possibility

does community participation produce dividends in social investment fund projects summary social investment funds sifs aim to strengthen local capacity for design implementation and maintenance of social and economic infrastructure projects and to increase community participation in ways that will promote their sustainability and effectiveness we explore key features of recent sifs intended to promote decentralized participatory decision making and management of projects in sif led education projects in honduras we investigate empirically whether efforts to implement a participatory approach improve the outcomes of these projects and community members perceptions of their effectiveness the findings identify elements of the participatory methodology which were associated with increased household and community participation and better household opinions of the projects and also show a link between participation and the probability of children s regular school attendance

the impact and targeting of social infrastructure investments lessons from the nicaraguan social fund this brief summarizes the impact and targeting of social infrastructure investments lessons from the nicaraguan social fund the fund was created in 1990 the benefit incidence and impact of projects financed by the nicaraguan emergency social investment fund are investigated using a sample of beneficiaries a national household survey and two distinct comparison groups the first group is constructed on the basis of geographic proximity between similar facilities and their corresponding communities the second is drawn from the national living standards measurement study survey sample using propensity score matching techniques the analysis finds that the social fund investments in latrines schools and health posts are targeted to poor communities and households whereas those in sewerage are targeted to the better off investments in water systems are poverty neutral education investments have a positive significant impact on school outcomes regardless of the comparison group the analysis finds that use of health investments is less clear using one comparison group the analysis finds that use of health clinics increased as a result of the investments using both it finds higher use of clinics for children under age six with diarrhea with neither comparison group does it find improvements in health outcomes social fund investments in water and sanitation improve access to services but have no effect on health outcomes

capture and governance at local and national levels 135 despite the importance of this issue not much systematic research appears to have been devoted to assessing the relative susceptibility of national and local governments to interestgroup capture here we describe a model of two party electoral competition with probabilistic voting behavior and lobbying by specialinterest groups based on david baron 1994 and gene grossman and elhanan helpman 1996 that helps identify determinants of relative capture at different levels of government these include relative levels of voter awareness and interest group cohesiveness electoral uncertainty electoral competition heterogeneity of districts with respect to inequality and the electoral system while some of these uphold the traditional madisonian presumption others are likely to create a tendency for lower capture at the local level so the net effect is theoretically ambiguous this suggests that the extent of relative capture may be context specific and needs to be assessed empirically

can vouchers reduce elite capture of local development projects experimental evidence from the solomon islands abstract external financing of local public goods can potentially create political resource curses by reducing citizen oversight exacerbating elite capture and producing policy outcomes that are sub optimal for the general population this paper experimentally tests a novel mechanism that seeks to mitigate elite capture of local development projects control communities are provided with block grants to fund local public goods while households in treatment communities are provided with vouchers that they may either contribute to a public good or redeem at a discount for a private capital good we find that the use of vouchers as a mechanism for aid delivery increases community participation in local public decision making changes the nature of allocation outcomes and improves community satisfaction with allocation outcomes

who is at the wheel when communities drive development evidence from the philippines summary community driven development cdd approaches have become an important part of development operations using data from 1 200 households in 66 communities participating in a cdd project in the philippines we analyze how communities select their proposals and how resources are allocated across villages resources flow to the poorest and more politically active villages controlling for poverty more unequal villages are more likely to receive funding this surprising result is because in more unequal villages the elected village leader is more likely to override community preferences and to influence inter village competition such that project resources flow to their villages

on markov equilibria in dynamic inventory competition we provide a review of the types of equilibria typically found in operations management inventory papers and a discussion on when the commonly used stationary infinite horizon open loop equilibrium may be sufficient for study we focus particularly on order up to and basestock equilibria in the context of inventory duopolies we give conditions under which the stationary infinite horizon equilibrium is also a markov perfect closed loop equilibrium these conditions are then applied to three specific duopolies the first application is one with stockout based substitution where the firms face independent direct demand but some fraction of a firm s lost sales will switch to the other firm the second application is one where shelf space display stimulates primary demand and reduces demand for the other firm s product the final application is one where the state variables represent goodwill rather than inventory these specific problems have been previously studied in both the single period and or stationary infinite horizon open loop settings but not in markov perfect closed loop settings under the markov perfect setting a variety of interesting dynamics may occur including that there may be a so called commitment value to inventory

the social appraisal of local public spending using revealed fiscal preferences abstract growth rate differentials between local governments are used to reveal preferences over local spending policies when fiscal tastes vary according to income and housing tenure and are constrained by local budgets and housing markets conditions are derived which indicate whether or not a locally financed fiscal expansion is desirable according to a generalized utilitarian social welfare function the setting for the empirical work is sydney australia

using referenda to improve targeting and decrease costs of conditional cash transfers cost effective allocation of conditional cash transfers cct requires identifying recipients with low opportunity costs who might change behavior this paper develops a low cost approach for improving program implementation by using a stated preference referendum style survey question to calculate willingness to accept wta for cct contracts this is illustrated in the context of mexico s payments for ecosystem services program with the paper finding that the estimated social cost based on wta is substantially lower than actual payments simulation of three geographic targeting approaches shows that joint selection using deforestation risk and wta could increase program impact under the same budget the paper also simulates modified payment schedules based on predicted wta and demonstrates that these could reduce program cost

a retrospective impact evaluation of the tamil nadu empowerment and poverty alleviation pudhu vaazhvu project abstractcommunity based livelihood interventions which focus directly on increasing income and employment have become an increasingly important component of large scale poverty reduction programmes we evaluate the impact of a participatory livelihoods intervention the tamil nadu empowerment and poverty reduction pudhu vaazhvu project pvp using propensity score matching methods the paper explores the impact of pvp on its core goals of empowering women and the rural poor improving their economic welfare and facilitating public action we find significant effects of pvp on reducing the incidence of high cost debt and diversifying livelihoods we also find evidence of women s empowerment and increased political participation

do local officials know something we don t decentralization of targeted transfers in albania abstract albania provides a small amount of social assistance to nearly 20 of its population through a system which allows a degree of community discretion in determining distribution this study indicates that relative to other safety net programs in low income countries social assistance in albania is fairly well targeted to the poor moreover the poverty targeting exceeds that which could be expected on the basis of proxy indicators of targeting alone communes appear to be using local information unlikely to be obtained on the basis of a questionnaire or formula this remains the case conditional on the level of funding allocated from the central government

identifying supply and demand elasticities of agricultural commodities implications for the us ethanol mandate we present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters in the agricultural context past yield shocks change inventory levels and futures prices of agricultural commodities we use our estimated elasticities to evaluate the impact of the 2009 renewable fuel standard on commodity prices quantities and food consumers surplus for the four basic staples corn rice soybeans and wheat prices increase 20 per cent if one third of commodities used to produce ethanol are recycled as feedstock with a positively skewed 95 percent confidence interval that ranges from 14 to 35 per cent jel q11 q16 q42 q48

administrative overspending in indonesian districts the role of local politics summary we analyze the determinants of the excessive administrative spending of local governments in indonesia in an unbalanced panel data set of 399 districts for 2001 09 we show that the proliferation of districts has not led to increased administrative spending instead a lack of political accountability is responsible for this excess the degree of political competition influences the level of administrative spending significantly newly introduced direct elections of district heads however did not curtail the waste

multi period modeling of two way price commitment under price dependent demand abstract this paper examines the use of price commitment policies in dynamic contracting in multiple period finite time horizons two specific forms of price commitment are considered one on the part of the retailer through a retail fixed markup contract and one on the part of the manufacturer through a price protection contract optimal policies for each form of price commitment are analytically derived as are optimal policies for the traditional price only and centralized supply chain scenarios that we use as comparisons we prove that optimal retail price and order size solutions exist in each period under the assumption of non increasing price dependent demand we show that the existence of retailer inventory between periods causes the optimal policies to differ from a static single period model further we show that a supplier offers a price protection policy as a signal to the retailer to resolve the gaming that naturally occurs under price only this effectively decouples the multi period dynamic contracting setting into repeated single period scenarios however the resulting behavior can actually inhibit supply chain performance on the retail commitment side we find that retail fixed markup policies are quite effective in improving supply chain efficiency we show that such policies can lead to pareto improvement over price only contracts and can even coordinate the supply chain in some situations

inventories market structure and price volatility abstract the effect of inventories on the level and volatility of price is analyzed under alternative market structures in a fairly general setting it is shown that inventories have no effect on the average level of prices in a cournot duopoly in the absence of depreciation the effect of storage on price volatility is analyzed in a more restrictive linear quadratic setting in which it is found that imperfectly competitive producers make less use of inventories for smoothing random fluctuations than is efficient the effect of market structure on price volatility depends on whether demand shocks or cost shocks are more important

reaching the poor cash transfer program targeting in cameroon identifying and selecting poor households with efficient targeting methods is essential for effective poverty alleviation programs this paper assesses the ex post performance of two popular targeting mechanisms proxy means testing pmt and community based targeting cbt in a pilot cash transfer program in cameroon several indicators and metrics to measure each method s performance in terms of inclusion of poor households and exclusion of non poor households are employed results consistently show that cbt performs poorly in terms of selecting households with low per capita consumption when compared to pmt cbt appears to select households with low physical and human capital regardless of actual consumption level however cbt also shows more variability in the selection decision than pmt even when alternative poverty definitions are used as robustness tests the pmt method used in the pilot slightly outperforms other targeting methods hybrid alternative pmt and universal targeting with equal budget but errors remain high when selecting 35 of the population for program participation the results suggest caution is needed in employing cbt methods to select households with low per capita consumption in an environment where poverty levels are high and administrative capacities are limited cbt performance may be improved through more uniform and consistent guidance on program selection criteria and process including explicit criteria that enable cbt monitoring as well as a better integration between pmt and cbt

on the unequal inequality of poor communities important differences exist between communities with respect to their needs capacities and circumstances as central governments are not able to discern these differences fully they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information however household and individual characteristics within communities can also vary substantially a growing theoretical literature suggests that inequality within communities can influence policy outcomes and that this influence could be harmful or helpful depending on the circumstances empirical investigations into the impact of inequality have to date largely been held back by a lack of systematic evidence on community level inequality the authors use household survey and population census data to estimate per capita consumption inequality within communities in three developing countries ecuador madagascar and mozambique communities are found to vary markedly from one another in terms of the degree of inequality they exhibit the authors also show that there should be no presumption that inequality is less severe in poor communities they argue that the kind of community level inequality estimates generated in this paper can be used in designing and evaluating decentralized antipoverty programs

inequality and group participation theory and evidence from rural tanzania abstract this paper investigates the determinants of group membership and in particular the effect of income inequality on individual incentives to join economic groups drawing on a simple model we show that an increase in inequality has an ambiguous effect and that the type of access rule open versus restricted access is key in determining what income categories are represented in the group furthermore the shape of the income distribution can be crucial to determine whether increased inequality leads to more or less group participation using survey data from rural tanzania we find that inequality at the village level has a negative impact on the likelihood that the respondents are members of any group this effect is particularly significant for relatively wealthier people both when relative wealth is objectively measured and when it is subjectively defined however when we disaggregate groups by type of access rule we find that inequality decreases participation in open access groups when there are wide disparities at the bottom of the distribution while it increases participation in restricted access groups when the disparities are around the middle and top part of the distribution finally we assess the impact of inequality on various dimensions of group functioning

durable good monopoly with inventories abstract this paper points out that familiar strategic considerations may induce a durable good monopolist to hold inventories the motive for inventory holding by the monopoly is the standard one of production smoothing but it arises here due to strategic considerations which induce the durable good monopoly to sell uneven quantities over time

information sharing and oligopoly in agricultural markets the role of the cooperative bargaining association we study incentives for information sharing among agricultural intermediaries in imperfectly competitive markets for farm output information sharing always increases expected grower and total surplus but may reduce expected intermediary profits even when expected profits increase with information sharing intermediary firms face a prisoner s dilemma where it is privately rational to withhold information given that other firms report truthfully this equilibrium can be avoided if firms information reports are verifiable and if firms commit to an ex ante contract that enforces participation in information sharing we show how agricultural bargaining legislation can implement such a contract with the bargained farm price representing a sufficient statistic of all information held by intermediary firms

the empirical merit of structural explanations of commodity price volatility review and perspectives this paper presents both the history of and state of the art in empirical modeling approaches to the world commodity price volatility the analysis builds on the storage model and key milestones in its development specifically it is intended to offer a reader unfamiliar with the relevant literature an insight into the modeling issues at stake from both a historical and speculative viewpoint the review considers primarily the empirical techniques designed to assess the merits of the storage theory it does not address purely statistical approaches that do not rely on storage theory and that have been studied in depth in other streams of the commodity price literature the paper concludes with some suggestions for future research to try to resolve some of the existing empirical flaws and hopefully to increase the explanatory power of the storage model

decentralization of governance and development all around the world in matters of governance decentralization is the rage even apart from the widely debated issues of subsidiarity and devolution in the european union and states rights in the united states decentralization has been at the center stage of policy experiments in the last two decades in a large number of developing and transition economies in latin america africa and asia the world bank for example has embraced it as one of the major governance reforms on its agenda for example world bank 2000 burki perry and dillinger 1999 take also the examples of the two largest countries of the world china and india decentralization has been regarded as the major institutional framework for the phenomenal industrial growth in the last two decades in china taking place largely in the nonstate nonprivate sector india ushered in a landmark constitutional reform in favor of decentralization around the same time it launched a major program of economic reform in the early 1990s on account of its many failures the centralized state everywhere has lost a great deal of legitimacy and decentralization is widely believed to promise a range of benee ts it is often suggested as a way of reducing the role of the state in general by fragmenting central authority and introducing more intergovernmental competition and checks and balances it is viewed as a way to make government more responsive and efe cient technological changes have also made it somewhat easier than before to provide public services like electricity and water supply relatively efe ciently in smaller market areas and the lower levels of government have now a greater ability to handle certain tasks in a world of rampant ethnic cone icts and separatist movements decentralization is also regarded as a way of diffusing social and political tensions and ensuring local cultural and political autonomy these potential benee ts of decentralization have attracted a very diverse range

supporting communities in transition the impact of the armenian social investment fund the armenian social investment fund supports communities efforts to improve local infrastructure during armenia s economic transition away from central planning financing community designed and implemented projects to rehabilitate primary schools water systems and other infrastructure this article considers the targeting household impact and community effects of the social fund s activities it relies on a nationally representative household survey oversampled in areas where the social fund was active using propensity and pipeline matching techniques to control for community self selection into the social fund it evaluates the household effects of rehabilitating schools and water systems the results show that the social fund reached poor households particularly in rural areas education projects increased households spending on education significantly and had mild effects on school attendance potable water projects increased household access to water and had mild positive effects on health communities that completed a social fund project were less likely than the comparison group to complete other local infrastructure projects suggesting that social capital was expended in these early projects by contrast communities that joined the social fund later and had not yet completed their projects took more initiatives not supported by the social fund in centrally planned economies national governments exerted tremendous economic control this control extended to investment in local infrastructure including building and maintaining roads schools and water systems when these economies collapsed governments became bereft of resources systems for maintaining local infrastructure began to fail as deep economic recession took hold schools and water systems fell into disrepair local public services deteriorated compounding other hardships for people living in postcommunist conditions but because communities were accustomed to relying on central authorities to meet local needs they often were unable to address their problems

community based development and poverty alleviation an evaluation of china s poor village investment program we conduct the first systematic evaluation of the world s largest community based development program china s flagship poverty alleviation program began in 2001 which finances public investments in designated poor villages based on participatory village planning we use matching methods and a panel household and village data set with national coverage to compare changes from 2001 to 2004 in designated poor villages that began plan investments and in designated poor villages that had yet to begin plan investments we find that the program significantly increased both government and village financed investments while the program did not increase the income or consumption of poorer households it did increase the income and consumption of richer households by 6 1 to 9 2 we also find suggestive evidence that governance matters in the distribution of program benefits relative gains were greater for richer households in villages with more educated leaders and higher quality village committees delivered greater benefits to both richer and poorer households

aid and agency in africa explaining food disbursements across ethiopian households 1994 2004 abstract we use a principal agent framework and data from the ethiopian rural household survey between 1994 and 2004 to understand biases in the distribution of food aid in ethiopia we show that even when aid is systematically misallocated aid recipients may match official classifications of needy households if agents deviate from allocation rules in ways that are difficult to monitor agent behavior is therefore best understood by comparing aid along dimensions of need that are visible to the principal with those that are difficult to observe outside the village we do this by using data on a panel of 943 households observed over six rounds of the ethiopian rural household survey in support of our model we find that while the demographics of aid recipients do match official criteria disbursements are increasing in pre aid consumption self reported power and involvement in village level organizations we conclude that the extent to which food aid insulates some of the world s poorest families from agricultural shocks depends on a nuanced interaction of policy constraints and informal structures of local power

local inequality and project choice theory and evidence from ecuador this paper provides evidence consistent with elite capture of social fund investment projects in ecuador exploiting a unique combination of data sets on village level income distributions social fund project administration and province level electoral results we test a simple model of project choice when local political power is unequally distributed in accordance with the predictions of the model poorer villages are more likely to receive projects that provide excludable private goods to the poor such as latrines controlling for poverty more unequal communities are less likely to receive such projects consistent with the hypothesis of elite capture these results are sensitive to the specific measures of inequality and elite power used in the empirical analysis and are strongest for expenditure shares at the top of the distribution

the regressive demands of demand driven development despite their explicit focus on reaching the poor many community driven development cdd projects have been found to be only mildly pro poor in their funding allocations this paper presents evidence of an explanation that has been overlooked in the cdd literature to date the requirement that beneficiaries must apply for projects in order to receive support the authors first examine data on the universe of project applications and funding under tanzania s flagship cdd program tanzania s social action fund and then use a census of 100 program villages to examine the determinants of both program awareness and program participation at the household level the data paint a consistent picture at both levels wealth access to information and political capital are important correlates of the ability to navigate the application process successfully the centrally dictated features of this decentralized program appear to be the most effective mechanisms in directing funds to the poor the results suggest that unless demand driven projects can develop ways of soliciting engagement from a broader cross section of the population they are unlikely to achieve truly progressive targeting

the cyclical behavior of strategic inventories this paper presents a model in which inventories are used by a duopoly to deter deviations from an implicitly collusive arrangement higher inventories allow firms to punish cheaters more strongly and can thus help to maintain collusion we show that when demand is high the incentive to deviate increases so that increases in inventories may be optimal for the duopoly this rationalizes the observed positive correlation between inventories and sales in our empirical section we show that as our model predicts this correlation is more important in concentrated industries we also provide several examples where inventories have been a factor in cartel behavior

food security and storage in the middle east and north africa in times of highly volatile commodity markets governments often try to protect their populations from rapidly rising food prices which can be particularly harsh for the poor a potential solution for food deficit countries is to hold strategic reserves which can be called on when international prices spike but how large should strategic stockpiles be this paper develops a dynamic storage model for wheat in the middle east and north africa mena region where imported wheat dominates the average diet the paper uses the model to analyze a strategy that sets aside wheat stockpiles which can be used when needed to keep domestic prices below a targeted price this paper shows that if the target is set high and reserves are adequate the strategy can be effective and robust contrary to most interventions strategic storage policies are counter cyclical and when the importing region is sufficiently large a regional policy can smooth global prices this paper shows that this is the case for the mena region nevertheless the policy is more costly than the pro cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps

worldwide acreage and yield response to international price change and volatility a dynamic panel data analysis for wheat rice corn and soybeans this study estimates a worldwide aggregate supply response for key agricultural commodities namely wheat rice corn and soybeans by employing a newly developed multi country crop and calendar specific seasonally disaggregated model with price changes and price volatility applied accordingly the findings reveal that although higher output prices serve as incentives to improve global crop supply as expected output price volatility acts as a disincentive depending on the crop the results show that own price supply elasticities range from about 0 05 to 0 40 output price volatility however has negative correlations with crop supply implying that farmers shift land other inputs and yield improving investments to crops with less volatile prices simulating the impact of price dynamics since 2006 we find that price risk has reduced the production response of wheat in particular and to a lesser extent rice thus dampening price incentive effects the simulation analysis shows that the increase in own crop price volatility during the 2006 2010 period has dampened yield by about 1 2 for the crops considered

the social impact of social funds in jamaica a participatory econometric analysis of targeting collective action and participation in community driven development qualitative data from a case study of the jamaica social investment fund reveal that the social fund process is elite driven and decision making tends to be dominated by a small group of motivated individuals however there is broad based satisfaction with the outcome quantitative data from 500 households mirror these findings by showing that ex ante the social fund does not address the expressed needs of the majority of individuals in the majority of communities by the completion of the project however 80 per cent of the community expresses satisfaction with the outcome an analysis of the determinants of participation reveals that better educated and better networked individuals dominate the process propensity score analysis demonstrates that jsif has had a causal impact on improvements in trust and the capacity for collective action but these gains are greater for elites

decentralizing eligibility for a federal antipoverty program a case study for china in theory the informational advantage of decentralizing the eligibility criteria for a federal antipoverty program could come at a large cost to the program s performance in reaching the poor nationally whether this happens in practice depends on the size of the local income effect on the eligibility cutoffs china s di bao program provides a case study poorer municipalities adopt systematically lower thresholds roughly negating intercity differences in need for the program and generating considerable horizontal inequity so that poor families in rich cities fare better the income effect is not strong enough to undermine the program s overall poverty impact other factors including incomplete coverage of those eligible appear to matter more

land reallocation in an agrarian transition liberalising key factor markets is a crucial step in the transition from a socialist control economy to a market economy however the process can be stalled by imperfect information high transaction costs and covert resistance from entrenched interests the article studies agricultural land reallocation in the wake of vietnam s efforts to establish a free market in land use rights following de collectivisation inefficiencies in the initial administrative allocation are measured against an explicit counterfactual land allocation responded positively but slowly to the initial inefficiencies there is no sign that the transition favoured the land rich or that it was thwarted by local officials vietnam s agrarian transition has closely followed a now classic policy scenario for economies in transition first one privatises the main productive assets in this case agricultural land use rights then one legalises their free exchange in the first step the de collectivisation of vietnam s agriculture meant that the land that had previously been farmed collectively was to be allocated by administrative means across households within each commune without a market mechanism to guide the process it can be expected that inefficiencies in land allocation would remain with some households having too much land relative to a competitive market allocation and some too little ravallion and van de walle 2004 document evidence of such inefficiencies in the initial administrative allocation at the time of de collectivisation

the role of obsolescence and inventory costs in providing commitment this paper modifies the cournot and stackelberg models to allow the firms to sell less than they have produced and to store the unsold portion of their output as inventory even if one of the firms can choose its output before the other if it is costless to carry unsold goods forward then the cournot outcome emerges we show however that costs of carrying the inventory forward endow the firms with a limited degree of commitment to sell what they have produced this partially restores the first mover advantage if the firms choose their outputs simultaneously the cournot outcome emerges and has locally consistent conjectures

targeting public goods to the poor in a segregated economy an empirical analysis of central mandates in rural india abstract while local governments are increasingly being vested with control over funds for public goods concern over the capture of decentralized funds by local elites has led decentralization to be combined with central mandates which require a certain proportion of funds to directly benefit the poor if local capture is pervasive however central mandates may not be effective despite the popularity of this combination of decentralization and centralized control there is little empirical evidence which separately identifies their effect on investment in public goods and hence assesses the effectiveness of central mandates this paper provides such evidence using data collected by the authors for the north indian state of punjab an economy where economic conditions facilitate such an analysis we find that central mandates are effective enhancing intra village equality in expenditure on public goods this finding informs the debate on the equity effects of centralized versus decentralized programs

global biofuels key to the puzzle of grain market behavior these jumps in the prices of these three major grains have also revealed the these jumps in the prices of these three major grains have also revealed the chaotic state of economic analysis of agricultural commodity markets economists chaotic state of economic analysis of agricultural commodity markets economists and scientists have engaged in a blame game apportioning percentages of responand scientists have engaged in a blame game apportioning percentages of responsibility for price spikes to bewildering lists of factors which include a surge in meat sibility for price spikes to bewildering lists of factors which include a surge in meat consumption caused by unprecedented increases of income of the vast populations consumption caused by unprecedented increases of income of the vast populations of china and india idiosyncratic regional droughts and fi res speculative bubbles a of china and india idiosyncratic regional droughts and fi res speculative bubbles a new fi nancialization of grain markets the slowdown of global agricultural research new fi nancialization of grain markets the slowdown of global agricultural research spending jumps in costs of energy and fertilizers shifts in interest rates the decline spending jumps in costs of energy and fertilizers shifts in interest rates the decline of the dollar the surge in biofuels demands bans on genetically modifi ed plants of the dollar the surge in biofuels demands bans on genetically modifi ed plants and climate change several observers have claimed to identify a perfect storm in and climate change several observers have claimed to identify a perfect storm in the grain markets in 2007 2008 a confl uence of some of the factors listed above the grain markets in 2007 2008 a confl uence of some of the factors listed above the continuing confused state of the economics of grain price volatility may the continuing confused state of the economics of grain price volatility may seem odd after all grain markets have many of the features of textbook competiseem odd after all grain markets have many of the features of textbook competitive models the products are relatively uniform their primary producers and tive models the products are relatively uniform their primary producers and ultimate consumers are atomistic price takers prices and outputs in the united ultimate consumers are atomistic price takers prices and outputs in the united states and other developed countries are unusually well measured by the standards states and other developed countries are unusually well measured by the standards of most goods and services in the world economy with data freely available from of most goods and services in the world economy with data freely available from

money flows water trickles understanding patterns of decentralized water provision in tanzania summary over the past three decades an increasing number of low and middle income countries have decentralized water provision to the local government level and have sought to more thoroughly involve users in service delivery such reforms reflect the twin goals of encouraging greater responsiveness to local needs and promoting sustainability this study illustrates how the aims of decentralization can be undermined in the absence of robust democratic competition and how governments interpret demand by voters in such settings focusing on the tanzanian water sector the paper first traces the distribution of money for water from the central government to the district level next i consider how district governments use these funds to distribute water infrastructure within their jurisdictions using geo referenced data on all 75 000 water points serving rural tanzanians i find that the central government s allocation of money to districts is fairly unresponsive to local needs however the pattern of distribution cannot primarily be explained by politics with the exception of consistent favoritism of the minister for water s home district political favoritism is more pronounced at the local level within districts the distribution of new water infrastructure is skewed to favor localities with higher demonstrated levels of support for the ruling party in addition wealthier and better connected communities those with the resources to more effectively express their demands are significantly more likely to benefit from new construction this suggests that demand responsive approaches to water provision can entrench regressive patterns of distribution

information and the operation of markets tests based on a general equilibrium model of land leasing in india abstract this paper develops an estimable general equilibrium model of land leasing to test the extent to which information is commonly held in a village and whether village markets are efficient information regarding the relative farming skill of households is found to be widespread but the assumption of perfectly efficient markets within the village is rejected these results have ramifications for the estimation of agricultural household models and for our understanding of rural institutions the model is derived from the primitives of the production technology the extent of information and the distributions of assets and several household unobservables simultaneity and selection issues are dealt with explicitly in a two stage maximum likelihood estimation procedure using panel data from india

the allocation and impact of social funds between 1992 and 1998 the peruvian social fund foncodes spent about us 570 million funding microprojects throughout the country many of these projects involved constructing and renovating school

are poorer states worse at targeting their poor abstract as a rule the governments of poor states provinces or countries do not seem to be very good at targeting public spending to their poor yet anti poverty programs often target poor states in the hope of reaching poor people should this change

benefits on the margin observations on marginal benefit incidence benefit incidence analysis has become a popular tool over the past decade especially for researchers at the world bank despite or perhaps because of the popularity of this method recent research has pointed out many of its limitations one of the most common criticisms of benefit incidence analysis is that its description of average participation rates is not necessarily useful in guiding marginal changes in public spending policies this article considers a variety of methods for analyzing the marginal benefit incidence of policy changes a key conceptual point is that despite the fact that the various methods measure marginal incidence they do not measure the same thing nor are they intended to do so there are many possible policy changes and thus many margins of interest each method captures one of these and so is of interest for some analyses and inappropriate for others empirically the precision of the methods differs substantially with those relying on differenced data or aggregations of households yielding standard errors that are quite large relative to the estimated shares

decentralized targeting of an antipoverty program abstract developing country governments often delegate authority over the targeting of antipoverty programs to community organizations while retaining control over how much goes to each community we offer a theoretical characterization of the information structure in such programs and the interconnected behavior of the various players our model motivates an econometric specification for explaining distributional outcomes results for bangladesh s food for education ffe program indicate that within village targeting improved with program size lower land inequality less remoteness fewer shocks and less private redistribution there is no sign that the center took account of village attributes conducive to reaching the poor

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

decentralizing development allocating public goods via competition abstract decentralizing the allocation of public goods by giving funds directly to communities takes advantage of local information concerning needs but leaves funds open to misuse or capture by local elites a large scale development project in indonesia attempts to overcome this downside of decentralized allocation by having communities compete locally for block grants competition weeds out less efficient projects increasing the number of villages bidding by 10 leads to a 1 8 decline in road construction costs increased community participation in project planning also leads to better outcomes

network structure and the aggregation of information theory and evidence from indonesia abstract we use unique data from over 600 indonesian communities on what individuals know about the poverty status of others to study how network structure influences information aggregation we develop a model of semi bayesian learning on networks which we structurally estimate using within village data the model generates qualitative predictions about how cross village patterns of learning relate to network structure which we show are borne out in the data we apply our findings to a community based targeting program where citizens chose households to receive aid and show that the networks that the model predicts to be more diffusive differentially benefit from community targeting jel d14 d83 d85 i32 o12 z13

strategic inventories in vertical contracts classical reasons for carrying inventory include fixed nonlinear production or procurement costs lead times nonstationary or uncertain supply demand and capacity constraints the last decade has seen active research in supply chain coordination focusing on the role of incentive contracts to achieve first best levels of inventory an extensive literature in industrial organization that studies incentives for vertical controls largely ignores the effect of inventories does the ability to carry inventory influence the problem of vertical control conversely can inventories arise purely due to incentive effects this paper explicitly considers both incentives and inventories and their interplay in a dynamic model of an upstream firm supplier and a downstream firm buyer who can carry inventories in our model none of the classical reasons for carrying inventory exists however as we prove the buyer s optimal strategy in equilibrium is to carry inventories and the supplier is unable to prevent

inter and intra seasonal crop acreage response to international food prices and implications of volatility understanding how producers make decisions to allot acreage among crops and how decisions about land use are affected by changes in prices and their volatility is fundamental for predicting the supply of staple crops and hence assessing the global food supply situation this study makes estimations of monthly i e seasonal versus annual global acreage response models for the world s principal staple food crops wheat corn soybeans and rice primary emphasis is given to the magnitude and speed of the allocation process estimation of intra annual acreage elasticity is crucial for expected food supply and for input demand especially in the light of the recent short term volatility in food prices the econometric results indicate that global crop acreage responds to crop prices and price risks input costs as well as a time trend depending on respective crop short run elasticities are about 0 05 to 0 40 price volatility tends to reduce acreage for some of the crops comparison of the annual and the monthly acreage response elasticities suggests that acreage adjusts seasonally around the globe to new information and expectations given the seasonality of agriculture time is of an essence for acreage response the analysis indicates that acreage allocation is more sensitive to prices in the northern hemisphere spring than in winter and the response varies across months

information learning and wage rates in low income rural areas in this essay we present evidence that employers in rural areas of developing countries have imperfect information with regard to the productivity of heterogeneous workers in addition to obtaining direct measures of the completeness of employer information we consider the implications of information asymmetries for the structure of casual labor markets we then evaluate the extent to which casual labor markets do in fact exhibit these attributes we find that 1 there is adverse selection out of the time rate labor market 2 employers discriminate statistically given two workers with different observed characteristics but the same actual productivity the worker from the group with the higher average productivity will have a higher wage 3 employers exhibit learning over time the extent of employer ignorance is negatively related to labor market exposure on the part of the workers and 4 calorie consumption affects productivity but is not rewarded in the time rate labor market in concluding we argue that an analysis of wage and employment patterns and the implications of these patterns for human capital investment in rural areas of developing countries that ignored the role of information problems could yield misleading conclusions

benefits on the margin benefit incidence analysis has become a popular tool over the past decade especially for researchers at the world bank despite or perhaps because of the popularity of this method recent research has pointed out many of its limitations one of the most common criticisms of benefit incidence analysis is that its description of average participation rates is not necessarily useful in guiding marginal changes in public spending policies this article considers a variety of methods for analyzing the marginal benefit incidence of policy changes a key conceptual point is that despite the fact that the various methods measure marginal incidence they do not measure the same thing nor are they intended to do so there are many possible policy changes and thus many margins of interest each method captures one of these and so is of interest for some analyses and inappropriate for others empirically the precision of the methods differs substantially with those relying on differenced data or aggregations of

preemptive investment toehold entry and the mimicking principle this article explores the ability offirms to successfully enter against an initial monopolist by pursuing toehold entry sinking entry costs early and planning to produce only later we endow the incumbent with strongfirst mover advantages for example capital is the only input and is completely sunk and in each period the incumbent invests before entrants nevertheless the incumbent s profit can easily be negative if it tries to deter all entry when the market is growing the incumbent may need prohibitive capital in place early on because once toehold entry has occurred the incumbent s planned capital expansion might no longer be rational surprisingly even if market conditions remain stationary the incumbent may still allow some entry in the model some firms are always deterred showing that several firms can deter others more effectively than can a singlefirm the difference arises because onefirm cannot commit to mimicking the aggregate investment path that several independent firms would choose this mimicking principle offers a general perspective for understanding when a monopolist finds deterrence optimal

are smallholder farmers better or worse off from an increase in the international price of cereals citation nakelse t dalton t j hendricks n p hodjo m 2018 are smallholder farmers better or worse off from an increase in the international price of cereals food policy 79 213 223 https doi org 10 1016 j foodpol 2018 07 006

world supply and demand of food commodity calories between the summers of 2006 and 2008 corn prices more than tripled from roughly 2 50 bushel to nearly 8 00 bushel prices for rice soybeans and wheat rose by similar or greater amounts the exceptionally large and unanticipated rise in prices was attributed to many factors including 1 ethanol subsidies 2 commensurately rising oil prices 3 unexpectedly large demand growth from china and india and 4 weatherrelated factors such as drought in australia while some have argued that the commodity price boom much like earlier housing and stock market booms were due to a

state and development the need for a reappraisal of the current literature this essay tries to bring out some of the complexities that are overlooked in the usual treatment of the state in the institutional economics literature and supplement the latter with a discussion of some alternative approaches to looking at the possible developmental role of the state it refers to a broader range of development goals including the structural transformation of the economy and focuses on problems like the resolution of coordination failures and collective action problems the conflicting issues of commitment and accountability and the need for balancing the trade offs they generate some ingredients of state capacity and political coalition building usually missed in the literature the possible importance of rent sharing in a political equilibrium the advantages and problems of political centralization and decentralization and the multidimensionality of state functions that may not be addressed by markets or private firms

accountability and decentralisation in government an incomplete contracts model this paper approaches the question of the appropriate level of decentralisation of power in government as a problem in the allocation of control rights under incomplete contracts the model of the paper compares allocations of power to local central and regional government as alternative means of motivating governments to act in the interests of citizens centralisation allows benefits from policy coordination but has costs in terms of diminished accountability which can be precisely defined as the reduced probability that the welfare of a given region can determine the re election of the government the model is extended to allow for conflicts of interest within regions and externalities between central and local governments in a federation it is also applied to determining levels of fiscal transfer between localities and to circumstances where governments may act as leviathans appropriating resources for their own use

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

does child labour displace schooling evidence on behavioral responses to an enrollment subsidy this brief summarizes the results of a gender impact evaluation study entitled does child labour displace schooling evidence on behavioral responses to an enrollment subsidy conducted between 1995 and 1996 in bangladesh the study observed that the subsidy increases schooling but its effect on child labour is ambiguous the subsidy increased schooling by far more than it reduced child labour substitution effects helped protect current incomes from the higher school attendance induced by the subsidy substitution effects helped protect current incomes from the higher school attendance induced by the subsidy the reduction in the incidence of child labour by boys girls represents about one quarter eighth of the increase in their school enrollment rate

does it pay to participate in decision making survey evidence on land co management in jiangsu province china member participation in decision making is a critical part of resource co management however little is known about the welfare consequences of participation this paper analyzes the impact of cooperative member participation in decision making on their incomes using data from 364 members of china s land cooperative program we distinguish two levels of participation in decision making voting and obtaining financial information and use a bivariate probit model and propensity score matching to estimate their impact the results indicate that household head s age gender and education and family size wealth and political affiliation determine participation in decision making participation in either voting or obtaining financial information has a positive impact on cooperative members land income there is also a strong joint effect of voting and obtaining information with an increase in land income of 16 we conclude that broad participation can ensure more equitable access to land income for members

determinants of collective action on the local commons a model with evidence from mexico i develop a model of cooperation in small irrigation systems i give conditions under which an equalizing redistribution of wealth increases the level of equilibrium cooperation but also show that some redistributions that increase inequality can also increase cooperation the distributive rule a combination of arrangements for maintenance cost sharing and water allocation also affects the cooperation level i estimate statistical models of cooperation for three maintenance indicators using field data from a study of mexican irrigation societies social heterogeneity and landholding inequality are significantly associated with lower maintenance distributive rules that allocate water proportionally to landholding size likewise reduce maintenance

competitive storage and commodity price dynamics by buying cheap and selling dear risk neutral commodity speculators can smooth commodity prices and induce serial dependence in price even when none would exist under a simple process of supply and demand commodity prices are variable and strongly positively correlated from one year to the next the variability is often explained by supply factors and the autocorrelation by the activities of speculators we show that this explanation is not consistent with the evidence speculation can substantially increase autocorrelation for prices that are weakly autocorrelated in its absence but not to the high levels that are observed in the data

making reform work institutions dispositions and the improving health of bangladesh we examine whether local governance can improve social development empirically using good and bad cases of public health outcomes in bangladesh we explore the institutional underpinnings of service provision digging down beneath the rules of the game to analyze the beliefs understandings and dispositions that drive social behavior changes in deep social attitudes led to improvements in social indicators regional variation in health outcomes is explained by the presence or absence of a dense web of relationships that enmeshed reformers in local systems of authority and legitimacy strengthening their actions and making local society more susceptible to change

political connections and social networks in targeted transfer programs evidence from rural ethiopia abstractdespite increasingly large scale social protection programs in africa we have limited evidence on the local political economy of their allocation we investigate community based processes for food aid allocation and the role of political and social networks using the case of ethiopia in the aftermath of a serious drought in 2002 local political authorities are in charge of food transfers in terms of free food aid or food for work programs we find that although targeting is clearly imperfect free food aid is responsive to need as well as targeted to households with less access to support from relatives or friends we also find a strong correlation with political connections households with close associates in official positions have more than a 12 higher probability of obtaining free food than households that are not well connected this effect is large someone without political connections has the same probability of getting food aid as someone more than twice as rich but with these conne

assessing the fuel poverty vulnerability of urban neighbourhoods using a spatial multi criteria decision analysis for the german city of oberhausen abstract tackling fuel poverty has become an increasingly important issue on many european countries political agendas consequently national governments local authorities and ngos have established policies and programmes to reduce the fuel poverty vulnerability of households however evaluations of such policies and programmes show that they barely reach those who are most in need the reasons for this failure are diverse and include fuel poverty measurement metrics local scale data availability and policy design this raises the question of how fuel poor homes can be more effectively identified and targeted to ensure that limited local and national budgets are used to benefit those who most need help area based approaches which pinpoint spatial units highly affected by fuel poverty due to their specific characteristics offer an opportunity for creating more tailored policies and programmes in this study the author developed a gis mcda multi criteria decision analysis using an ahp analytical hierarchy process and applied the approach to the german city of oberhausen the overall issue of fuel poverty was broken down into three vulnerability dimensions heating burden socio economic and building vulnerability the relative importance of fuel poverty criteria and the dimensions were evaluated by experts and an overall fuel poverty index was created to assess the relative fuel poverty vulnerability of 168 urban neighbourhoods the analysis offers insights into the spatial pattern of fuel poverty within a city and thus provides an opportunity to channel efforts towards households in those neighbourhoods most in need it also demonstrates that a trade off between ecological and social targets should be considered in the development of future policies for tackling fuel poverty

stocks to use ratios and prices as indicators of vulnerability to spikes in global cereal markets we identify critical stocks to use ratios surs for major grains and for an index of total calories from these grains the latter appears to be a promising indicator of vulnerability to large price spikes when the current price shows no cause for concern more generally our results suggest that stocks data though no doubt unreliable can be valuable complements to price data as indicators of vulnerability to shortages and price spikes

household returns to land transfers in south africa a q squared analysis abstract the south african land reform programme has been widely criticised for its slow pace as well as its apparent lack of contribution to poverty reduction however there is little systematic evidence of the impact of land transfers on their beneficiaries due to data scarcity this paper combines econometric evidence based on official household surveys with qualitative data collected specifically to triangulate and complement the econometric analysis the qualitative data analysis confirms the plausibility of the econometric finding that on average beneficiaries do not gain from participation and suggests that the main reason for the disappointing impact of participation is the incompatibility of consultant led land use plans to land grantees skills

political market characteristics and the provision of educational infrastructure in north india in this paper we are concerned with the provision of schools in rural north india particularly with whether such provision is determined by the demographic and economic characteristics of the region or whether local democracy also plays a role we find that the probability that a governing party loses an election has a positive effect on the provision of schooling infrastructure while the margin of victory of the governing party has a negative effect political reservation for members of the scheduled castes scs has a positive effect on schooling infrastructure in villages with a large sc population but a negative effect overall

inventory holding as a strategic weapon to deter entry recent papers by dixit 1980 and eaton and lipsey 1981 have explored the strategic use of committed product specific capital by an incumbent firm in order to influence a post entry equilibrium and in some cases make entry unattractive by committing or sinking part of the production costs prior to entry the incumbent creates a credible shift in its own reaction function if entry should occur in this way the payoffs in the post entry equilibrium can be influenced to the incumbent s advantage the entry game thus consists of two stages the first in which the incumbent is able to strategically commit itself prior to entry and the second or post entry period in which a duopoly equilibrium is realized the more costs that are put up front by the incumbent the greater is the post entry output it will wish to sell for a given output of the entrant and the lower will be the resulting equilibrium price if the set up or fixed costs of entry are sufficiently high entry may be rendered unprofitable this paper extends the idea in a natural way all the production costs of a quantity of output can be sunk or committed by stockpiling inventory of the product the stock of inventory held by the incumbent firm represents a credible shift in its reaction function in response to entry in the following way the inventory is a stock that can be sold off over time in a way consistent with intertemporal profit maximization constrained by the presence of the entrant moreover the threat to sell off the inventory in response to entry is credible since given that entry has occurred the opportunity cost of the inventory is zero it seems reasonable to require that any strategic asymmetry between incumbent and entrant should be restricted to commitments made by the former prior to entry conditional on such commitments the post entry game should give neither firm a strategic advantage this requirement is the same as the game theoretic concept of perfectness 1 entry can be credibly deterred because the entrant knows that were entry to take place it would be in the incumbent s own interest to follow the anticipated sales programme of inventory in order to demonstrate that entry may be deterred by holding a stock of inventory that is sufficiently large that deterrence can be made the perfect equilibrium of the complete entry game the properties of the equilibrium with entry must be derived the post entry equilibrium is modelled here as a pair of nash strategies in sales programmes if the sales programme anticipated by the entrant in the post entry equilibrium implies a negative present value entry will be deterred thus successful entry deterrence implies that the equilibrium with entry is never realized the incumbent can then continue to receive monopoly profits less the holding cost of the inventory which serves as a credible deterrent to entry but is never sold

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item