contracting and vertical coordination in the united states pork industry coordination activities in the pork production industry are growing rapidly these range from the totally integrated system through ownership to that which bridges the input supply production processing and merchandising segments through various informal or formal forms of coordination for example some arrangements involve contract for production or delivery of products of a specified amount quality etc still others may involve agreements or linkages between independent participants in the industry all are aimed at improving the participants competitive positioned the industry over what it would be without the linkages industry development or adjustment is riot uniform across regions in the united states this manuscript documents those differences outlining some reasons for the differences additionally competitive relationships along with contract growth and a comparison of returns and risks of selected contracts are presented

production contracts and productivity in the u s hog sector this article measures the impact of contracting on partial and total factor productivity and the production technology of u s hog operations a sample selection model accounts for the fact that unobservable variables may be correlated with both the operators decision to contract and farm productivity results indicate that the use of production contracts is associated with a substantial increase in factor productivity and represents a technological improvement over independent production results also identify determinants of farmers decisions to contract and other factors influencing farm the rapid increase in the use of production contracts is a notable feature of the structural change taking place in the us hog industry between 1992 and 1998 the portion of feeder pig to finish hog operations using production contracts increased from 11 to 34 while the share of output produced under contract increased from 22 to 63 mcbride mcbride and key production contracts offer several potential advantages over independent production that could explain their growing prevalence contracts may serve to lower transaction costs associated with search negotiation and transfer reduce asymmetric information between growers and processors about product quality improve coordination of product delivery and lower income risk for growers in addition contracting may raise farm productivity by improving the quality of managerial inputs by speeding the transfer of technical information to growers or by facilitating growers access to credit thereby permitting the adoption of newer more efficient technologies in this article we focus on identifying and measuring the farm level productivity gains if any that can be attributed to contracting the recent growth in contracting does not necessarily imply that contracts are associated with higher farm productivity the increase in the use of contracts may have been propelled

private food safety and quality standards for fresh produce exporters the case of hortico agrisystems zimbabwe abstract there is evidence that the challenges of complying with stricter food safety and quality standards are acting to exclude small scale producers from export supply chains for high value agricultural products the case of hortico agrisystems illustrates the considerable challenges and costs faced by supermarket suppliers in sourcing from a broad base of small scale producers in the context of evolving food safety and quality standards while small scale producers are able to achieve levels of compliance at least equal to those of large scale producers multi tiered and dynamic systems of control are required to maintain control these need to include measures that facilitate compliance incentives to reward good performance and penalties to punish non compliance in establishing a sustainable supply system in this context both exporters and small scale producers face a steep learning curve in adjusting to new requirements further emphasising the need for supply chains to be responsive to change

expanding the solution set organizational economics and agri environmental policy abstract the market failure paradigm dominates agri environmental research and policy organizational economics provides an alternative framework for analyzing agri environmental problems and points to alternative solutions in this paper the traditional approach of creating markets for environmental goods and services is critiqued and set aside to provide space for an organizational analysis from an organizational perspective the relationship between the state and agricultural agents is viewed as grounded in an over arching exchange relationship including elements of cooperation and trust such a collaborative exchange relationship may prove useful in supporting exchange between agricultural agents and the state leading to the provision of ecological goods and services highlighting the potential of organizational economics the analysis suggests that agri environmental research and policy go further in accounting for and investigating the unique organizational modes of exchange governing the production of food fiber and ecological goods and services

the acquisition of fisher body by general motors abstract it is commonly said that in 1926 general motors was led to acquire its supplier of automobile bodies fisher body because fisher body held up general motors it is claimed that fisher body did this by locating its body plants far away from the general motors assembly plants and by adapting inefficient methods of production thus increasing both the cost of producing bidies and the profits of fisher body under its cost plus contract this tale is factually incorrect what general motors acquired in 1926 was the 40 percent of the shares of fisher body that it did not already own furthermore fisher body did not locate its plants far away from the general motors assembly plants it is also most implausible for many reasons that the fisher brothers would have used inefficient methods of production there is no evidence that a holdup occurred

design and rating of risk contingent credit for balancing business and financial risks for kenyan farmers abstractweather related agricultural risks and limited access to credit are serious impediments to agricultural productivity and growth in developing countries this paper describes a novel insuran

productivity economies and efficiency in u s agriculture a look at contracts the growing importance of production contracts especially for some livestock species and in certain regions suggests that contracts confer economic benefits on farmers this trend has however stimulated concerns about the impacts of contracting on farm structure and concentration and environmental degradation which have led to efforts by various levels of government to regulate contract production for example in the u s hog industry between 1992 and 1998 the portion of feeder pigto finish hog operations using production contracts increased from 11 to 34 while the share of output produced under contract increased from 22 to 63 key and mcbride mcbride and key recent growth in hog contracts have been particularly noteworthy in the upper midwest with 2002 contracted production accounting for 47 of the value of total farm production in iowa and minnesota compared to only about 5 in 1996 and virtually none in 1991 meanwhile production contract levels in north carolina the other center of hog production have been relatively stable production contracts offer several potential advantages over independent production that could explain their increasing prevalence such as lowering income risk for growers contracting may also raise farm productivity by improving the quality of managerial inputs speeding the transfer of technical information to growers and facilitating growers access to credit thereby permitting the adoption of newer more efficient technologies at the same time

the new institutional economics this outstanding book presents new original contributions from some of the world s leading economists including ronald coase douglass c north masahiko aoki oliver e williamson and harold demsetz it demonstrates the extent and depth of the new institutional economics research programme which is having a worldwide impact on the economics profession

the microfinance promise in the past decade microfinance programs have demonstrated that it is possible to lend to low income households while maintaining high repayment rates even without requiring collateral the programs promise a revolution in approaches to alleviating poverty and spreading financial services and millions of poor households are served globally a growing body of economic theory demonstrates how new contractual forms offer a key to microfinance success particularly the use of group lending contracts with joint liability for the most part however high repayment rates have not translated into profits and studies of impacts on poverty yield a mixed picture in describing emerging tensions the paper highlights the diversity of innovative mechanisms beyond group lending contracts the measurement of financial sustainability the estimation of economic and social impacts the costs and benefits of subsidization and the potential to reduce poverty through savings programs rather than just credit the promise of microfinance has pushed far ahead of the evidence and an agenda is put forward for addressing critical empirical gaps and sharpening the terms of policy discussion

the informal sector and the political economy of development this paper takes an initial step in integrating insights from two sets of literature which have focused on central aspects of development with unfortunate independence it highlights politically valuable resources which are identified in the political economy literature and shows that the informal sector literature provides ample evidence that these resources in general are i scarcely available to informal entities ii poorly valued in their possession and iii more often collectively unexploited by them overall there seems to be an important though neglected bias in how the political system in less developed countries formulates crafts and implements policy

property rights and consumption volatility evidence from a land reform in vietnam summary during vietnam s transition from a socialist to a market economy household s property rights over agricultural land were considerably strengthened through a land certification program this resulted in active formal credit and land markets either of which potentially affects consumption levels and volatility this article evaluates the program impact with respect to consumption outcomes in particular it identifies the channel of impact through which improved property rights affect consumption volatility we find that land certification increases consumption levels for rural households but also consumption volatility for a subgroup of households identified by an instrument we show that the certification program affects consumption outcomes of this subgroup through presumably more risky credit based agricultural investment at the intensive margin

household savings and residential mobility in informal settlements in bhopal india strategies to address the problem of informal settlements have focused on slum upgrading sites and services programmes and tenure security there has been less attention on what enables slum dwell

a century of research on agricultural markets this article provides a perspective on major innovations in research on agricultural markets over the past century we review research on market structure and performance vertical coordination arrangements and institutions for producer collective action contributions to empirical modeling of agricultural price determination and marketing margins are also evaluated as are innovations in research on spatial market relationships and the role of storage finally we discuss contributions to understanding market information systems and the functioning of market based mechanisms for agri

slipping into and out of poverty the dynamics of spells this paper examines the dynamics of poverty previous analyses have examined either fluctuations in the male heads earnings or the frequency of poverty periods over a fixed time frame our approach depends on a definition of spells of poverty using this methodology we find that the majority of poor persons at any time are in the midst of a rather long spell of poverty the methodology also allows us to estimate that less than 40 percent of poverty spells begin because of a drop in the heads earnings while 60 percent of the spells end when the heads earnings increase thus researchers must focus on household formation decisions and on the behavior of secondary family members there has been a dramatic resurgence recently of discussion of the underclass the discussion is reminiscent of debates about poverty during the 1960s when the notions of a culture of poverty particularly as popularized by michael harrington s other america 1962 dominated both intellectual and policy thinking the idea of an underclass seems inconsistent however with much of the research on the dynamics of poverty during the 1970s that research using new longitudinal data seemed to show that the bulk of the poor were poor for only a few years the research also showed that the poor were a very heterogeneous group including a small minority of persistently poor the persistence of poverty is of interest both for understanding the phenomenon and for developing policy claims about dependency and separate life styles among the poor rest on assumptions about the long term nature of poverty questions

a framework to analyze the performance of thinly traded agricultural commodity markets thinly traded agricultural commodity markets are a concern for farmers and policy markers due to the belief that prices in these settings will be highly volatile subject to manipulation and incapable of efficiently allocating resources analysis of thin agricultural markets has to date been impeded by lack of an appropriate analytical framework from which to study their behavior in this paper we propose the modern agricultural markets mam framework as an appropriate paradigm through which to view and evaluate thin markets we argue that thinly traded markets that meet key conditions required for a mam will generate maximum economic surplus and enable farmers to earn at least a competitive return on their investments in the absence of these conditions however the concerns known as the thin market problem have validity we set forth the mam framework interpret it in a thin market context and conduct several brief case studies of thin markets to illustrate use of the approach and draw some key inferences about these markets behavior the analysis indicates that appropriate government policies directed to thin markets are those that facilitate their convergence to mam status but in reality key policies under recent consideration would have the opposite effect

low pay dynamics and transition probabilities this paper models low pay transitions in britain using a bivariate probit model with endogenous selection to address the initial conditions problem and parental variables as instruments the exogeneity of the initial state is strongly rejected and results in considerable overstatement of the effects of explanatory factors the probability of being low paid depends strongly on low pay in the previous year restricting attention to those who remain employees results in an overstatement of the probability of the low paid moving up the earnings distribution but is not found to have much effect on the estimated effects of explanatory variables

contract and exit decisions in finisher hog production finisher hog production in north america has shifted toward larger units and contract format since 1990 exit among independent growers has been high we develop a model showing that growers with any of three efficiency attributes lower innate hazard of exit variable costs or contract adoption costs are more likely to contract produce more and expend more on business protection using 2004 agricultural resource management survey data a recursive bivariate probit model confirms that contracting producers are less likely to exit specialization increases the probability of contracting education nonfarm income and older production facilities are significant in increasing expected exit

measuring the effect of risk attitude on marketing behavior despite extensive study researchers continue to search for consistent and reliable measures of risk preferences to explain market behavior we find that a measure combining experiments rooted in expected utility theory and measures derived from surveys explains spot and contractual sales but does not exhibit substantially greater explanatory power than its underlying components survey based measures are generally more significant indicators of marketing choices but experimental measures reveal how risk attitudes vary over a range of probable outcomes which is important in light of increased commodity price volatility given recently identified limitations on the applicability of expected utility theory we suggest that researchers include survey methods to obtain low cost supplemental measures

animal health inputs endogenous risk general infrastructure technology adoption and industrialized animal agriculture abstract this paper develops a microeconomic model of concentrated animal feeding operations that admits roles for all of animal health inputs genetic profile choices and the pertaining economic infrastructure the basic model emphasizes how time on feed feed density and biosecurity choices interact as well as how these choices respond to i input prices and ii attributes regarding animal productivity parameters that might be influenced by policy choices such as animal welfare strictures and restraints on use of medication we show that ostensibly substituting inputs in protecting against animal health risks may in fact be complements and that the model s production choices come as a complementary package we then extend the model to endogenize the choice of animal genetics a finding is that innovations in general infrastructure encourage herd owners to choose more feed efficient but less hardy animals higher feed conversion efficiency then induces the use of denser feed rations accelerated finishing and greater levels of biosecurity actions at farm perimeters our theory provides a coherent framework for explaining associations among inputs and outcomes that are linked with confined animal agriculture it also explains how animal protein supply chain technology adoption and performance can differ according to a region s state of infrastructure why responses to a change in infrastructure may be large and why public sector efforts to reduce production risk may beget private sector effort to do so

transient poverty poverty dynamics and vulnerability to poverty an empirical analysis using a balanced panel from rural china china s economic reforms starting in the late 1970s have resulted in rapid economic growth with annual growth in gross domestic product averaging greater than 10 percent per year for more than thirty years accompanying this rapid growth in national accounts have been rapid and widespread reductions in poverty with these reductions in poverty however there has often been observed an increase in income inequality both between as well as within rural and urban sectors this rising income gap challenges the notion that economic reforms in china have been as successful as the poverty statistics would suggest in this paper we suggest that an alternative view would be to consider the effects of these reforms on changing the chronic nature of poverty and reducing household vulnerability to poverty using a balanced panel from rural china from 1991 through 2006 we find that most poverty among our sample has shifted from being chronic in nature to being transient with households either shifting into a state of being non poor moving in and out of poverty among our sample vulnerability to poverty has been declining over time but the declines are not uniform over time or space we decompose household vulnerability status into two proximate causes low expected income and high income variability finding vulnerability increasingly due to income variability additionally we demonstrate that vulnerable households have very different characteristics than non vulnerable households

who stays poor who becomes poor evidence from the british household panel survey we estimate a first order markov model of poverty persistence and entry rates for working age britons and demonstrate the importance of controlling for endogenous selection via initial poverty status and attrition predicted poverty transition rates reveal substantial heterogeneity in poverty transition rates but there is also substantial genuine state dependence in poverty

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

sub therapeutic antibiotics and the efficiency of u s hog farms antimicrobial drugs are frequently fed to hogs at sub therapeutic levels to promote feed efficiency and growth however in response to concerns that sub therapeutic antibiotics stas are promoting the development of antimicrobial drug resistant bacteria the u s food and drug administration recently adopted a strategy to phase out antibiotics for such production uses this study uses a stochastic frontier model to estimate the costs to u s hog producers of a ban on stas for growth promotion to address potential sample selection issues we employ a recently developed empirical approach that corrects for biases from both observed and unobserved variables

review of de soto s the mystery of capital in the mystery of capital hernando de soto promotes his explanation of why formal capital markets function poorly in developing countries de soto argues that much of the population of developing countries lacks access to credit not because they lack assets but because ownership of their property is secured informally which prevents the use of property as collateral the inability to convert assets into capital keeps the developing world from benefiting from capitalism

the developing world s bulging but vulnerable middle class summary western notions of the middle class are of little obvious relevance to developing countries instead the middle class is identified here as those living above the median poverty line of developing countries even if still poor by rich country standards over 1990 2005 economic growth and global distributional shifts allowed an extra 1 2 billion people to join the developing world s middle class four fifths came from asia and half from china many of those in this new middle class remain fairly close to poverty only 100 million of the 1 2 billion would not be considered poor in any developing county economic growth typically came with an expanding middle class

the unbanked evidence from indonesia to analyze the prospects for expanding financial access to the poor bank professionals assessed 1 438 households in six provinces in indonesia to judge their creditworthiness about 40 percent of poor households were judged creditworthy according to the criteria of indonesia s largest microfinance bank but fewer than 10 percent had recently borrowed from a micro bank or formal lender possessing collateral appeared as a minor determinant of creditworthiness in keeping with microfinance innovations although these households were judged able to service loans reliably most desired small loans calculations show that the bank given its current fee structure and banking practices will lose money when lending at the scales desired so while innovations have helped to extend financial access it remains difficult to lend in small amounts and cover costs

modelling low income transitions we examine the determinants of low income transitions using first order markov models that control for initial conditions effects those found to be poor in the base year may be a non random sample and for attrition panel retention may also be non random our econometric model is a form of endogeneous switching regression and is fitted using simulated maximum likelihood methods the estimates derived from british panel data for the 1990s indicate that there is substantial genuine state dependence in poverty we also provide estimates of low income transition rates and lengths of poverty and non poverty spells for persons of different types

the productivity impacts of formal and informal land rights evidence from madagascar this paper studies the relationship between land rights and agricultural productivity whereas previous studies used proxies for soil quality and instrumental variables to control for the endogeneity of land titles the data used here include precise soil quality measurements which in principle allow controlling for the unobserved heterogeneity between plots empirical results suggest that formal land rights i e land titles have no impact on productivity but that informal land rights i e landowners subjective perceptions of what they can and cannot do with their plots have heterogeneous impacts on productivity

rational herding toward the poor evidence from location decisions of microfinance institutions within pakistan analyzing the geographical location of almost all the microfinance institutions mfis within pakistan this paper gives further evidence that microfinance activities do not reach the poorest rural areas especially we explore how this result is driven by the uncertainty faced by mfis in their location decision i e they can hardly predict accurately whether or not they will perform financially furthermore we find that mfis are spatially clustered and identify three main reasons for this common attraction factors i e the characteristics of one area fits to the preferences of all mfis so that they are all located in the same areas payoff externalities to be collocated and herd behavior i e mfis follow one another most importantly we find that a significant part of this herding process is rational i e early locations of mfis convey information used by later ones such that it reverses or neutralizes the negative impact of uncertainty resulting then in more locations in needier areas since it allows them to be located in poorer areas mfis improve the achievement of their social goal this latter result is rather good news for those who reckon that a better access to financial services enhances economic growth and fosters poverty alleviation indeed rational herding constitutes an endogenous moderator effect to the big issue that financial services penetration is too weak in the poorest rural areas

information asymmetry as a reason for food industry vertical integration three trends that have been subject to recent discussion are a movement away from undifferentiated agricultural commodities toward more specialized products reduced reliance on open markets for raw agricultural products and a movement toward agricultural industrialization recent research suggests that demographic trends may be causing the first trend while the other two are closely related phenomena this research suggests that information externalities arising from uncertainty concerning the nature of food quality and problems in detecting quality may be reasons why vertical coordination is being used to circumvent the marketplace

evaluating seasonal food storage and credit programs in east indonesia abstract predictable annual lean seasons occur in many rural areas including west timor in indonesia imperfections in savings and credit markets make it difficult for staple farmers to convert harvest season output into lean season consumption we conduct a randomized evaluation of a seasonal food storage program and a food credit program by providing improved ways to transfer assets across seasons each program functions as a subsidy on lean season consumption we find that neither program had effects on staple food consumption the storage program increased non food consumption the credit program increased reported income and reduced seasonal gaps in consumption our results are consistent with positive income effects through the expansion of budget sets but suggest that the average household could be close to staple food satiation

access to finance an unfinished agenda recent data compilations show that many poor and non poor people in many developing countries face a high degree of financial exclusion and high barriers in access to finance theory and empirical evidence point to the critical role that improved access to finance has in promoting growth and reducing income inequality an extensive literature shows the channels through which finance promotes enterprise growth and improves aggregate resource allocation there is less evidence at the household level however and on the effectiveness of policies to overcome financial exclusion the article summarizes recent efforts to measure and analyze the impact of access to finance and discusses the unfinished research agenda

property rights for the poor effects of land titling secure property rights are considered a key determinant of economic development the evaluation of the causal effects of property rights however is a difficult task as their allocation is typically endogenous to overcome this identification problem we exploit a natural experiment in the allocation of land titles in 1981 squatters occupied a piece of land in a poor suburban area of buenos aires in 1984 a law was passed expropriating the former owners land to entitle the occupants some original owners accepted the government compensation while others disputed the compensation payment in the slow argentine courts these different decisions by the former owners generated an exogenous allocation of property rights across squatters using data from two surveys performed in 2003 and 2007 we find that entitled families substantially increased housing investment reduced household size and enhanced the education of their children relative to the control group these effects however did not take place through improvements in access to credit our results suggest that land titling can be an important tool for poverty reduction albeit not through the shortcut of credit access but through the slow channel of increased physical and human capital investment which should help to reduce poverty in future generations

why do small scale producers choose to produce under contract lessons from nontraditional vegetable exports from zimbabwe summary this article explores the motivations behind the decision of small scale producers to grow nontraditional vegetables under contract for export based on a survey of small scale producers in zimbabwe four factors are identified as motivating contracting namely market uncertainty indirect benefits e g knowledge acquisition income benefits and intangible benefits respondents are clustered according to the relative importance of these factors in their contracting decision four clusters are identified and related to the characteristics of these farmers including size of the farm amount of land devoted to export crops access to alternative markets and the proportion of family income derived from export crops the results suggest that there are systematic differences between farmers in their decisions to contract which needs to be recognized in contract design and management 2005 elsevier ltd all rights reserved

environmental regulations and the problem of sustainability moving beyond market failure abstract the standard metaphor of market failure is an impediment to the crafting of environmental policy that can escape policy lock in sustainability requires a policy process that can avoid this lock in sustainability concerns the creation of dynamic human processes that can respond to indeed anticipate unanticipated feedback from biological processes

the demand for tenure security in developing countries abstract we use survey data for manila the philippines to estimate hedonic functions for formal and squatter housing values we show that on average a rented squatter unit in manila would rent for 15 percent more if it were a formal sector unit an owned squatter unit would sell for 25 percent more if it were a formal sector unit these percentages are interpreted as eviction risk discount for squatter dwellings we conclude that assistance projects that provide secure tenure over a wide area will bestow comparatively greater benefits on lower income households and to those in newer less established settlements since the risks that they bear initially are greater

mobile money financial inclusion and development a review with reference to african experience we survey literature on mobile money and its contribution in promoting financial inclusion and development with a focus on sub saharan africa we use taxonomic descriptive and analytical methods to evaluate the state of knowledge in the area we analyse how mobile technology in general may contribute to economic development and financial inclusion in theory and practise we explain the mechanics of mobile money using kenya s m pesa as a canonical example and consider whether the literature has fully established the potential economic impact of mobile money especially its contribution to financial inclusion we also consider market structure pricing and regulatory implications of mobile money we conclude by highlighting issues that require further investigation the take up of mobile money mobile money and financial inclusion substitutability between mobile money and conventional finance and regulatory structures for institutions providing mobile money services

the fable of fisher body abstract general motors s gm s acquisition of fisher body is the classic example of market failure in the literature on contracts and the theory of the firm according to the standard account in 1926 gm merged vertically with fisher body a maker of auto bodies because of concerns over transaction specific investment and contractual holdup that account exhibits errors of historical fact and interpretation general motors acquired a 60 percent interest in fisher body in 1919 moreover the contractual arrangements and working relationship prior to the 1926 merger exhibited trust rather than opportunism fisher body s production technology did not exhibit asset specificity the merger reflected economic considerations specific to that time not some immutable market failure we demonstrate that vertical integration was directed at improving coordination of production and inventories assuring gm of adequate supplies of auto bodies and providing gm with access to the executive talents of the fisher bro

a poverty dynamics approach to social stratification the south african case abstract the wave of upbeat stories on the developing world s emerging middle class has reinvigorated a debate on how social class in general and the middle class in particular ought to be defined and measured in the economics literature most scholars agree that being middle class entails being free from poverty which means being able to afford the basic things in life not only today but also tomorrow in consequence there is an increasing tendency to define the middle class based on a lack of vulnerability to poverty in this paper we strengthen and expand on these existing approaches in three ways first we incorporate the differentiation between the middle class and a non poor vulnerable group into a broader social stratification schema that additionally differentiates between transient and chronic poverty second in estimating the risk of poverty we employ a multivariate regression model that explicitly allows for possible feedback effects from past poverty experiences and accounts for the potential endogeneity of initial conditions unobserved heterogeneity and non random panel attrition four factors insufficiently addressed in existing studies third we highlight the value of paying attention to these conceptual and modelling issues by showing that class divisions based on monetary thresholds inadequately capture a household s chances of upward and downward mobility we then apply our conceptual framework to the south african case we find that only one in four south africans can be considered stably middle class or elite access to stable labor market income is a key determinant of achieving economic stability a lack of jobs as well as the prevalence of precarious forms of work drive high levels of vulnerability which in turn constrains the development of an emergent middle class not only in south africa but potentially also in other parts of the developing world that face similar labor market challenges

why are child poverty rates higher in britain than in germany a longitudinal perspective we analyze why child poverty rates were much higher in britain than in western germany during the 1990s using a framework focusing on poverty transition rates child poverty exit rates were significantly lower and poverty entry rates significantly higher in britain we decompose these cross national differences into differences in the prevalence of trigger events changes in household composition household labor market attachment and labor earnings and differences in the chances of making a poverty transition conditional on experiencing a trigger event the latter are the most important in accounting for the cross national differences in poverty exit and entry rates

one kind of freedom poverty dynamics in post apartheid south africa abstract a 1993 south african living standards survey documented the legacy of apartheid in the form high levels of inequality and human insecurity drawing on a 1998 re survey of households in the 1993 study this paper explores whether this legacy has been superseded or whether apartheid s end has been only one kind of freedom that has left households in a poverty trap from which they cannot escape after proposing a theoretically grounded dynamic poverty typology that distinguishes stochastic from structural poverty transitions the paper goes on to estimate that significant numbers of the south african poor are potentially trapped in a structural poverty trap and lack the means to escape poverty over time

creating holdup through vertical integration fisher body revisited abstract general motors s gm s 1926 acquisition of fisher body has long served as a cornerstone of hold up arguments for vertical integration this paper utilizes primary historical evidence to make three related claims first it shows that gm s initial investment in fisher body occurred primarily to gain access to the fisher brothers specialized human assets second it shows that holdup was not the cause of gm s purchase of fisher body instead the primary factors leading to vertical integration were gm management s fears over the fisher brothers impending departure coupled with problems of financing new body plants finally i show that while holdup was not an issue prior to integration the fisher brothers successfully held up gm after they became employees far from reducing opportunistic behavior vertical integration increased gm s vulnerability to rent seeking behavior based in human asset specificity

product development cost seasonality region marginalization and a more demanding consumer agricultural production is becoming more like manufacturing in the routinization of processes the extent to which raw materials are processed capital intensity and its emphasis on throughput some ascribe the changes to demand side factors while others look to technological innovations emphasizing cost seasonality as a reference indicator for nature s role in agricultural production this paper develops a simple model that includes both supply and demand sides we show how cost seasonality can impede product development to meet consumer needs and find that there may be a ceiling level of cost seasonality below which a non seasonal equilibrium production profile occurs price seasonality is decreasing in cost seasonality an increase in demand for more processed products induces a shift toward non seasonal production regions with strongly seasonal cost advantages will produce lower value products while less seasonal regions will produce higher value products if a region with high cost seasonality has a non seasonal cost disadvantage then an increase in demand for processing can reduce the region s competitiveness

will farmers trade profits for stewardship heterogeneous motivations for farm practice selection we investigate the trade off agricultural producers face between profits and stewardly activities when selecting farm practices instead of the profit maximization framework we model producer behavior in an expanded utility framework built on production technology and including two utility components self and social interests the framework introduces inherent heterogeneity and social environmental motivations into farmer behavior based on this model we hypothesize that there are farmers that are willing to forego some profit to engage in stewardly farm practices with an empirical study we provide evidence that some farmers are willing to make this sacrifice results are consistent with the multi utility hypothesis

organizational economics in agriculture policy analysis the ongoing industrialization of u s agriculture encompasses important changes in farm production practices in the organization of farm input and output markets and in the mix of activities carried out by farm operators these shifts raise important issues for the role of government in the sector and for the design of research and data programs to support public policy analysis basic frameworks of organizational economics in particular concepts from principal agent models organizational design and transaction costs have direct applications in addressing these issues 1 while organizational economics has been used in some areas of policy analysis the concepts are underutilized in other areas industrialization encompasses four important organizational shifts to more differentiated food products to more explicitly coordinated production and marketing channels such as contracts to expanded use by farmers of leasing arrangements alliances and service purchases and to increased farm sizes these shifts are the most prominent organizational responses to an underlying collection of causal forces at play including the mechanical chemical and biological innovations that drove twentieth century advances in agricultural productivity as well as more recent information and biotechnology advances the forces underlying agricultural industrialization affect the design and impact of and support for various public policies in agriculture policy has long encompassed commodity programs designed to support farm household incomes and manage supplies market

household responses to economic and demographic shocks marginal logit analysis using indonesian data abstract we analyse the responses of indonesian households to demographic and economic shocks and examine how these responses vary in relation to the household s permanent income and the extent to which the shock is common across the community households respond in different ways to demographic and economic shocks economic shocks are more likely to result in a labour supply response from the household and this probability is further increased if the shock is common for rural households use of savings increases with permanent income the article also examines the role of the interviewer in influencing survey responses

do microfinance institutions accomplish their mission evidence from the relationship between traditional financial sector development and microfinance institutions outreach and performance this article analyses the relationship between outreach and performance of microfinance institutions mfis on the one hand and traditional financial sector development on the other the results indicate that mfis reach more clients and are more profitable in countries where access to the traditional financial system is low this finding is in line with the market failure hypothesis mfis respond to a need that banks do not fulfill and mfis flourish where the formal financial sector fails along the same line the results demonstrate that mfis serve poorer people in countries with well developed financial systems the results suggest that in countries with well developed financial systems the two sectors stand in more direct competition with each other this competition pushes mfis down the market and makes mission drift by mfis less likely

the size of the informal sector in peru a critical comment on hernando de soto s el otro sendero abstract in el otro sendero hernando de soto presented four statistics concerning i the number of workers and ii the number of hours worked in the informal sector in peru in 1984 iii total informal gdp from 1951 to 1984 and iv the growth of the informal sector from 1985 to 2000 these statistics are being quoted internationally by for example the world bank and the economist of london in this paper we demonstrate that there are apparent inconsistencies between i and ii and that iii and iv are based on the application of inappropriate models that are econometrically suspect

agri environmental policies in the eu and united states a comparison abstract agri environmental policies aeps in the united states and the european union are examples of payments for environmental services that pay farmers to reduce the negative externalities of agricultural production while serving as a means to transfer public funds to farmers we show that despite similar origins aeps in the two regions differ both in their specific objectives and in their implementation for example aeps in most member states of the eu 15 have the additional objective of using agriculture as a driver for rural development this objective is achieved by compensating farmers for the private delivery of positive public goods such as attractive landscapes produced by agriculture the rationale is market failure and there is empirical evidence that europeans are willing to pay for such positive externalities no comparable provision exists in u s policy by contrast u s aeps focus almost entirely on reducing agriculture s negative externalities such as soil erosion second we find that u s programs are more targeted than their eu counterparts and take opportunity cost into account the eu programs on the other hand address a wider range of externalities and are focused more on the paying for a particular farming process than reducing specific negative externalities the eu takes a broader view of aeps than does the united states both in terms of type of activity that can be funded and by using less targeting by land characteristics and so the european program could be more easily used as a mechanism for transferring income to producers despite this we find evidence that many of the amenities targeted by the programs are demanded by the population

tenure security and urban squatting while recent studies have shown that up to 35 of the total urban population of the third world live in squatter settlements there is a dearth of economic analysis on the phenomenon of squatting this paper attempts to fill this gap the equilibrium model argues that the difference in unit housing prices between the non squatting formal sector of a city and its squatting informal sector reflects the premium associated with a secure tenure status the empirical portion of this paper uses hedonic price techniques to derive the average premium on tenure security in a medium sized philippine city davao results show that formal sector unit dwelling prices are about 18 renters to 58 owners more than in the informal sector these equilibrium price differentials were found to be greater for lower income groups larger household sizes and households with older heads for renters and younger heads for