bank spread with uncertain deposit level and risk aversion abstract this paper derives a model of the banking firm under uncertainty and risk aversion the selection of the bank s optimal spread between loan and deposit rates is emphasized the model s results provide some implications for bank asset quality capital regulation and deposit insurance for example it is shown that increases in the level of equity capital tend to increase the bank s spread under dara this implies an improvement in bank asset quality on the other hand as the deposit supply function becomes more volatile the bank s spread narrows which implies a decline in the quality of the bank s assets

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

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

uniqueness of stationary equilibrium payoffs in the baron ferejohn model abstract we consider a multilateral sequential bargaining model in which the players may differ in their probability of being selected as the proposer and the rate at which they discount future payoffs for games in which agreement requires less than unanimous consent we characterize the set of stationary subgame perfect equilibrium payoffs with this characterization we establish the uniqueness of the equilibrium payoffs for the case where the players have the same discount factor we show that the payoff to a player is nondecreasing in his probability of being selected as the proposer for the case where the players have the same probability of being selected as the proposer we show that the payoff to a player is nondecreasing in his discount factor journal of economic literature classification numbers c72 c78 d70

vote buying supermajorities and flooded coalitions in a recent paper banks 2000 adopting the framework of our model groseclose and snyder 1996 derives several new and noteworthy results in addition he provides a counterexample to our proposition 4 here we explain the error in our proposition but note that we can correct it easily if we invoke an additional assumption in equilibrium the winning vote buyer constructs a nonflooded coalition that is she does not bribe every member of her coalition we conclude with a brief discussion of the substantive implications of banks s proposition 1 we note that it provides additional support for our general claim that minimal winning coalitions should be rare in a vote buying game

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

caps on political lobbying comment following the 1999 israeli elections the winning candidate s ehud barak s party was fined 3 2 million dollars for violating israel s campaign financing laws by exceeding the spending cap imposed and raising 1 2 million dollars illegally see time europe 2000 while adhering to the strict ncaa recruiting regulations the university of oregon spent 3 million dollars to make their football locker room the best anywhere including the nfl lexington herald leader 2003 when asked about the previous salary cap in the uk football league players said that it the cap was so artificial that clubs paid money in brown paper envelopes bbc2 newsnight 2002 in all these cases there officially existed a rigid spending cap however they show that even though a cap exists the cap might not be easily enforced when enforced the penalty may just be financial rather than a change in outcome the cap may be enforced and adhered to but there may also be alternate perhaps less effective hence more costly means of spending we also see that the flexible nature of the cap is often built into the rules by examining the salary caps of the four major us sports leagues where the caps are routinely exceeded in baseball and basketball surpassing the cap invokes a pure financial penalty called a luxury tax which is proportional to the excess in football while the cap is stated in terms of salaries many teams use signing bonuses as a way to circumvent it in ice hockey there is a dual cap system where the luxury tax is invoked on salaries falling between the two caps and signing bonuses are an allowed method to exceed the

the globalization of organic agro food networks summary this article analyzes the booming world trade in organic agro foods such as tropical products counterseasonal fresh produce and processed foods research focuses on expanding south north networks linking major us and european markets with major production regions particularly in latin america employing a commodity network approach i analyze organic production distribution and consumption patterns and the roles of social political and economic actors in consolidating international trade organic certification proves central to network governance shaping product specifications production parameters and enterprise participation my analysis identifies key contradictions between mainstream agro industrial and alternative movement conventions in global organic networks 2004 published by elsevier ltd

predictability and power in legislative bargaining the rules and procedures of legislatures often provide legislators with information bearing on the identities of upcoming proposers for a broad class of legislative bargaining games we establish that markovian equilibria necessarily deliver all economic surplus to the first proposer whenever the information structure permits the legislators to rule out some minimum number of proposers one round in advance this result holds regardless of the recognition process and even if players vary in patience and risk aversion it raises the possibility that procedures adopted in the interest of transparency may contribute to the imbalance of political power

a model of endogenous government formation political parties bargain over the allocation of cabinet portfolios when forming coalition governments noncooperative theories of legislative bargaining typically predict that the formateur enjoys a disproportionate share of government ministry positions however empirical evidence indicates that parties receive shares of portfolios proportional to their share of legislative seats that a government party contributes to the government coalition in support of gamson s law of portfolio allocation this article examines government formation as a process in which both the government coalition and the formateur are determined endogenously in equilibrium if parties have similar preferences over cabinet portfolios the share of seats they are allocated is proportional to the parties sizes

coordination risk and cost impacts on economic development in poor rural areas this paper addresses issues relevant to a critical problem in economic development how to get rapid pro poor economic growth in poor rural areas in africa and south asia where most of the world s dollar a day poor live it examines constraints to the development of coordinated exchange systems in poor rural areas focusing on the core problem of thin markets and low density of economic activity in these areas transaction cost and risk analysis is integrated into a conventional neoclassical production economics framework to describe the existence of low level equilibrium traps in transactions and supply chains and to generate important insights for development policy

coalitional bargaining with consistent counterfactuals abstract we propose a new solution concept for tu cooperative games in characteristic function form the scoop which builds on the symmetric nash bargaining solution nbs by adding a consistency requirement for negotiations inside every coalition the scoop specifies the probability of success and the payoffs to each coalition the players share the surplus of a coalition according to the nbs the disagreement payoffs are computed as the expectation of payoffs in other coalitions using a common probability distribution that is derived from the prior distribution the predicted outcome can be probabilistic or deterministic but only an efficient coalition can succeed with probability one we discuss the necessary and sufficient conditions for an efficient solution in either case the scoop always exists is generically unique for superadditive games and is easy to compute moreover in the spirit of the nash program we propose a non cooperative protocol whose stationary equilibrium identifies the scoop as the limit equilibrium outcome

bargaining in legislatures bargaining in legislatures is conducted according to formal rules specifying who may make proposals and how they will be decided legislative outcomes depend on those rules and on the structure of the legislature although the social choice literature provides theories about voting equilibria it does not endogenize the formation of the agenda on which the voting is based and rarely takes into account the institutional structure found in legislatures in our theory members of the legislature act noncooperatively in choosing strategies to serve their own districts explicitly taking into account the strategies members adopt in response to the sequential nature of proposal making and voting the model permits the characterization of a legislative equilibrium reflecting the structure of the legislature and also allows consideration of the choice of elements of that structure in a context in which the standard institution free model of social choice theory yields no equilibrium

racing with uncertainty and strategic interaction between competitors as the race unfolds most of the existing literature examines one or other of these features but not the two combined our aim is to see how the efforts of competitors in a race vary with the intensity of rivalry between them in our principal model whch is of a one dimensional race it is shown that the leader in the race makes greater efforts than the follower and efforts increase as the gap between competitors decreases under certain conditions the same results hold in our second related model which is of a two dimensional race

state intervention for food price stabilisation in africa can it work abstract although its arguments may have more general applicability this paper discusses the desirability and options for the stabilisation of staple food prices principally in eastern and southern africa it addresses three broad questions i why is stabilisation of food grain prices desirable ii what is technically feasible and iii can the governance and trade issues thrown up by suggested mechanisms be solved it considers a number of options for price stabilisation assessing the strengths and weaknesses of each and suggesting situations in which each may be appropriate

primaries and the new hampshire effect candidates for u s presidential elections are determined through sequential elections in single states the primaries we develop a model in which candidates can influence their winning probability in electoral districts by spending money on campaigning the equilibrium replicates several stylized facts very well campaigning is very intensive in the first district the outcome of the first election then creates an asymmetry in the candidates incentives to campaign in the next district which endogenously increases the equilibrium probability that the first winner wins in further districts on the normative side our model oers a possible explanation for the sequential organization it leads in expectation to a lower level of advertising expenditures than simultaneous elections moreover if one of the candidates is the more eective campaigner sequential elections also perform better with regard to the selection of the best candidate

contract farming and smallholder incentives to produce high quality experimental evidence from the vietnamese dairy sector in emerging markets for high value food products in developing countries processing companies search for efficient ways to source raw material of high quality one widely embraced approach is contract farming but relatively little is known about the appropriate design of financial incentives in a small farm context we use the example of the vietnamese dairy sector to analyze the effectiveness of existing contracts between a processor and smallholder farmers in terms of incentivizing the production of high quality milk a framed field experiment is conducted to evaluate the impact of two incentive instruments a price penalty for low quality and a bonus for consistent high quality milk on farmers investment in quality improving inputs statistical analysis suggests that the penalty drives farmers into higher input use resulting in better output quality the bonus payment generates even higher quality milk we also find that input choice levels depend on farmers socio economic characteristics such as wealth while individual risk preferences seem to be less important implications for the design of contracts with smallholders are discussed

realigning research and extension to focus on farmers constraints and opportunities this paper argues that research and extension have failed to 1 develop technologies that take into account farmers resource constraints and risks and 2 improve farmers capacity to adapt technologies to their own situations the paper critiques continued use of blanket high dose fertilizer recommendations arguing for approaches that teach farmers how to maximize returns from smaller more affordable input purchases developingsuch technologies requires that researchers integrate a wider range of stakeholders farmers extension agents agricultural exporters and processors into research activities at an earlier point in time than has been the case although evidence that these new approaches are increasing the use of purchased inputs remains weak a number of important lessons are emerging about how research and extension outcomes are influenced by institutional culture and incentives the authors conclude that developingrecommendations for small affordable input doses and trainingfarmers so they can adapt recommendations to their particular circumstances is as much an institutional challenge as a technology challenge 2003 elsevier ltd all rights reserved

a policy agenda for pro poor agricultural growth abstract sub saharan africa and parts of south asia are likely to hold large numbers of very poor rural people into the foreseeable future although both history and theory suggest a pre eminent role for agricultural growth in poverty reduction in poor agrarian economies such growth today faces new difficulties many of these difficulties are endogenous to today s poor rural areas others result from broader processes of global change but some are due to changes in the dominant policy environment emphasizing liberalization and state withdrawal examination of 20th century green revolutions suggests that active state interventions were important in supporting critical stages of agricultural market development unfortunately such interventions benefits in institutional development are easily overlooked whereas their high costs are much more visible policy implications are discussed

the evolution of a free banking system the institutional features of models of unregulated monetary systems have often been arbitrarily and implausibly assumed this paper instead provides realistic grounding for important features by constructing a logical evolutionary account of free banking sophisticated and orderly arrangements are shown to emerge from competition and the pursuit of less costly methods of payment the emergence of standardized commodity money is followed by the development in turn of basic money transfer banking easily transferable bank liubilities and clearinghouses the features of an evolved free banking system differ from those assumed in recent models of competitive payments systems

how private contract enforcement mechanisms can succeed where public institutions fail the case of juhocukor a s the enforcement of contracts is necessary for efficient exchange and investment in economic activities contracts can be enforced through a variety of mechanisms both public and private however in many developing and transitional countries these public institutions are either absent or ineffective in ensuring contract enforcement under such conditions private enforcement mechanisms may provide a suitable replacement for public enforcement institutions this may be done externally through a third party or internally through self enforcing agreements this paper analyzes the use of self enforcing arrangements or internal private enforcement mechanisms using a case study of an agri business in a transition economy juhocukor a s a slovakian sugar processor we show that the use of internal private contract enforcement mechanisms can have a significant positive effect on output and efficiency for both partners to the exchange transaction in an environment characterized by the absence or ineffectiveness of public enforcement institutions 2000 elsevier science b v all rights reserved

bidding for the surplus a non cooperative approach to the shapley value abstract we propose a simple mechanism to determine how the surplus generated by cooperation is to be shared in zero monotonic environments with transferable utility the mechanism consists of a bidding stage followed by a proposal stage we show that the subgame perfect equilibrium outcomes of this mechanism coincide with the vector of the shapley value payoffs we extend our results to implement the weighted shapley values finally we generalize our mechanism to handle arbitrary transferable utility environments the modified mechanism generates an efficient coalition structure and implements the shapley values of the super additive cover of the environment journal of economic literature classification numbers c71 c72

linking smallholders to markets determinants and impacts of farmer collective action in kenya summary this article investigates determinants and impacts of cooperative organization using the example of smallholder banana farmers in kenya farmer groups are inclusive of the poor although wealthier households are more likely to join employing propensity score matching we find positive income effects for active group members yet price advantages of collective marketing are small and high value market potentials have not yet been tapped beyond prices farmer groups function as important catalysts for innovation adoption through promoting efficient information flows we discuss the conditions under which collective action is useful and through what mechanisms the potential benefits emerge

an instantaneous control model of bank reserves and federal funds management abstract empirical evidence indicates that large banks are generally net buyers of federal funds while small banks tend to be net sellers asymmetric information bank monopoly power or risk aversion arguments have been offered for this phenomenon however these models do not address the close link between bank reserves and federal funds purchases as alternative means of liquidity management our stochastic control model focuses on this link and has three main implications 1 it analyzes interaction between the above mentioned influences 2 it identifies three additional reasons for banks federal funds activity and 3 it examines the transmission of monetary policy in a dynamic framework

cash crop production food price volatility and rural market integration in the third world large farmers in the third world often devote to cash crops a larger share of their land than do small farmers this paper suggests a possible explanation even in the presence of food markets third world farmers food security is best assured by food self sufficiency a model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern simulations further indicate that food market integration reduces the need for food self sufficiency policy implications are drawn regarding domestic trade liberalization and agricultural technology

a bargaining model of collective choice we present a general model of legislative bargaining in which the status quo is an arbitrary point in a multidimensional policy space in contrast to other bargaining models the status quo is not assumed to be bad and delay may be pareto efficient we prove existence of stationary equilibria the possibility of equilibrium delay depends on four factors risk aversion of the legislators the dimensionality of the policy space the voting rule and the possibility of transfers across districts if legislators are risk averse if there is more than one policy dimension and if voting is by majority rule for example then delay will almost never occur in one dimension delay is possible if and only if the status quo lies in the core of the voting rule and then it is the only possible outcome this core selection result yields a game theoretic foundation for the well known median voter theorem our comparative statics analysis yield two noteworthy insights i if the status quo is close to the core t hen equilibrium policy outcomes will also be close to the core a moderate status quo produces moderate policy outcomes and ii if legislators are patient then equilibrium proposals will be close to the core legislative patience leads to policy moderation

recognition without replacement in legislative bargaining abstract this paper studies infinite horizon sequential bargaining among n 3 players in which a proposer is randomly selected from the pool of potential proposers if the proposal is rejected the current and previous proposers are excluded from the pool of potential proposers and the game moves on to the next round until every player has had the same number of opportunities to be the proposer to analyze the model with a particular time dependency within each sequence of n rounds a cycle i characterize the stationary equilibrium of a stochastic game which i call cycle stationary subgame perfect cssp equilibrium the cssp equilibrium is unique in payoffs and analogous to the subgame perfect equilibrium of some forms of finite horizon bargaining even when every player is entirely patient the proposer s share in the cssp equilibrium is smaller than that predicted by the stationary equilibrium of the baron ferejohn legislative bargaining model

pro poor agricultural biotechnology can the international research system deliver the goods abstract while global investment in agricultural research by the private sector is increasing with growth in developing country markets and the emergence of new technologies complementary public sector investment is stagnating or declining in many developing countries this review argues that the changing roles of the public and private sectors in generating new scientific knowledge may adversely affect the diffusion of explicitly pro poor technologies technologies that are simultaneously yield enhancing and poverty reducing comparing historical evidence from the green revolution with recent evidence from the emerging era of agricultural biotechnology this review argues that a more pluralistic international system for agricultural research will be more responsive to poverty only if the strategic leadership role of the public sector is strengthened certain research functions are reallocated to the private sector and new policy and organizational mechanisms are used to stimulate pro poor research in and for developing country agriculture

competition and coordination in liberalized african cotton market systems abstract private operators now dominate input supply crop buying and ginning activities in many african cotton sectors varying levels of competition are observed but greater levels of competition are not necessarily associated with better system performance this paper explores this phenomenon drawing on the liberalization experience of ghana mozambique tanzania uganda zambia and zimbabwe while the capacity of the state to support markets remains weak there may be tradeoffs between the level of competition and the degree of coordination achieved between players within a sector different sectoral structures are observed with a different role for the state appropriate for each

contract farming configuration smallholders preferences for contract design attributes while contract farming cf can enhance smallholders income in developing countries empirical research on the motivation of smallholders to participate in cf is scarce this paper explores farmer preferences for particular contract design attributes we combined analytical hierarchy process and discrete choice experiments to investigate the importance of contract design attributes on the basis of data collected among potato farmers in ethiopia we found that input market uncertainty is more important than output market uncertainty in smallholders decision to participate farmers tend to minimize their risk by opting for the buyer firm above the state and ngos as providers of seed inputs and technical assistance the results imply that the success of a cf scheme depends on the willingness of the firm to incorporate the preferred contract design attributes institutional intervention in the input market could induce agribusiness firms to offer attractive contracts for smallholders

fertilizer market development a comparative analysis of ethiopia kenya and zambia abstract this article synthesizes case studies from kenya zambia and ethiopia to assess how differences in the implementation of fertilizer marketing policies have affected the costs and risks borne by marketing actors the investment response by private traders and fertilizer consumption financial cost accounting techniques indicate that domestic marketing costs account for 50 or more of farm gate prices the sum of importer wholesaler and retailer profit margins generally account for less than 10 there are opportunities to reduce domestic marketing costs through the following reducing port fees coordinating the timing of fertilizer clearance from the port with up country transport reducing transport costs through port rail and road improvements reducing high fuel taxes and reducing the uncertainty associated with government input distribution programs that impose additional marketing costs on traders estimated reductions in the farm gate price of fertilizer from implementing the full range of options identified in each country range from 11 to 18 price reductions of this magnitude if passed along to farmers would increase farmers effective demand for fertilizer investments in selected publically provided goods often considered outside the scope of fertilizer marketing policy per se strongly affect the costs of fertilizer farmers willingness to pay for it and hence the performance of markets

smallholders institutional services and commercial transformation in ethiopia this article examines the role of institutional services of credit input supply and extension in the overall commercial transformation process of smallholder agriculture in ethiopia survey data collected in 2006 from 309 sample households in three districts of ethiopia are used for the analyses tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals a probit model is used to measure these effects on the adoption of improved seeds intensity of use of seeds is analyzed using an ordinary least squares model logarithmic cobb douglass functions are estimated to analyze the effect of access to services on crop productivity heckman s two stage estimation is used to examine determinants of household market participation and the extents of participation results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in ethiopia in particular appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services

uniqueness of stationary equilibrium payoffs in coalitional bargaining we study a model of sequential bargaining in which in each period before an agreement is reached the proposer s identity is randomly determined the proposer suggests a division of a pie of size one each other agent either approves or rejects the proposal and the proposal is implemented if the set of approving agents is a winning coalition for the proposer the theory of the fixed point index is used to show that stationary equilibrium expected payoffs of this coalitional bargaining game are unique this generalizes eraslan 34 insofar as a there are no restrictions on the structure of sets of winning coalitions b different proposers may have different sets of winning coalitions c there may be a positive probability that no proposer is selected

why new crop technology is not scale neutral a critique of the expectations for a crop based african green revolution poverty reduction during the asian green revolution has been attributed to the inherent scale neutrality of new crop varieties making them equally beneficial to small scale and large scale farmers the term scale neutral is now reappearing in debates on agricultural development in africa with claims that crop technology is inherently scale neutral and that african smallholders will significantly benefit from new crop varieties not specifically developed for their contexts using a social shaping of technology sst perspective and the concept of biological embeddedness this paper critically examines whether it is helpful to describe crop technology as scale neutral when drawing lessons from the asian green revolution about how new crop technology can be of benefit to african smallholders the paper describes how political commitment rather than inherently scale neutral crops was central for the outcome of the asian green revolution it also highlights that while the effects of crop biology are often disregarded in adoption studies biology significantly affected the ability of green revolution crop technology to benefit smallholders and continues to do so today using maize and gm crops as examples this paper suggests that gm crops in their current form have reinforced a technological trajectory established with hybrid technology and directed it away from smallholder practices and agroecologies consequently describing crop technology as inherently scale neutral is not helpful for understanding how crop technology works in africa today and prevents important lessons being learned from the asian green revolution

coalitional bargaining with competition to make offers abstract the paper analyzes a simple discrete time noncooperative coalitional bargaining game in which at each stage there is a contest for the right to make a proposal the pure stationary subgame perfect equilibrium payoff set is equal to the core journal of economic literature classification numbers 026

linking farmers to markets different approaches to human capital development abstract programs focused on developing community level management skills and human capacity can increase the opportunities for small farmers to benefit from market participation using a framework that links the concepts of collective power and agricultural development and drawing upon evidence from mali mozambique and cameroon the authors differentiate three types of approaches to capacity building contract business programs such as out grower and cash crop schemes facilitate farmer access to goods and services required for production and marketing of a target commodity project technology programs usually mediated by non governmental organizations ngos focus on the promotion of improved technology process human capacity investments also facilitate technology adoption and marketing but focus initially on the development of foundation skills and social capital including assistance for collective self help literacy programs marketing activities and decentralized development planning although the latter programs tend to be slower in producing tangible results the skills emphasized often determine the ability of a community to access inputs and market production beyond the life of a project

intermediation and cost determinants of large bank liability composition abstract a translog profit function is estimated for an aggregate of large u s money center banks over 1970 1975 estimates of liability substitution elasticities and own price elasticities of demand are obtained and contrasted with results from earlier partial equilibrium studies statistical analyses led to the rejection of two commonly held propositions in banking 1 that the aggregation of all bank debt to obtain a debt equity ratio is valid and 2 that asset structure can be ignored when liability composition is being determined a mixed full information maximum likelihood estimation technique was used in estimation

marketing cooperative vs commission agent the turkish dilemma on the modern fresh fruit and vegetable market in turkey the wholesale markets law was enacted in 1995 to facilitate small scale growers access to the fresh produce market cooperatives and commission agents have thus become the main marketing structures available to small scale fresh produce growers to supply supermarkets and comply with their new requirements in this paper we question the advantages and disadvantages that confront small farmers with respect to those marketing structures to allow for market matching or quality upgrading drawing on ownership and transaction cost arguments we use an analytical framework to identify and compare the costs of these marketing organizations based on data collected through a large number of interviews with stakeholders we show that commission agents and credit cooperatives tend to be more efficient than traditional cooperatives as regards sales performance and decision costs however the lack of apparent competition between commission agents does not allow for sufficient provision of incentives for producers to invest in high quality production consequently credit cooperatives are the only structure progressively turning to strategies of quality upgrading and supermarket supply the flipside of such strategies is that they may lead to the marginalization of small scale farmers

can public private partnerships leverage private investment in agricultural value chains in africa a preliminary review summary public private partnerships ppps may be one way of increasing the level of private sector investment into poorly performing agricultural value chains this paper considers a range of ppp mechanisms that respond to different market failures affecting such chains and draws on principal agent theory to illustrate the challenges it reviews emerging experience with a number of these mechanisms along with experience from other sectors that may shed light on generic problems of implementing ppps in africa while finding some positive impacts on investment it notes that state failures can also undermine ppp effectiveness as the evidence base is still limited it calls on organizations promoting innovative ppps to disclose available information for critical examination

risk in banking and capital regulation this paper investigates the role of bank capital regulation in risk control it is known that banks choose portfolios of higher risk because of inefficiently priced deposit insurance bank capital regulation is a way to redress this bias toward risk utilizing the mean variance model the following results are shown a the use of simple capital ratios in regulation is an ineffective means to bound the insolvency risk of banks b as a solution to problems of the capital ratio regulation the theoretically correct risk weights under the risk based capital plan are explicitly derived and c the theoretically correct risk weights are restrictions on asset composition which alters the optimal portfolio choice of banking firms the recent increase in bank failures especially after the 1980 and 1982 deregulatory acts has again ignited a controversy over the risk portfolio of the banking industry given the importance of this sector there has been increased scrutiny of the industry s motives for risk taking and possible regulatory changes to improve its stability these investigations have centered around two rather complementary areas the first of these is the role of deposit insurance and how its current pricing procedure encourages risk taking and justifies current bank regulations the works of buser chen and kane 4 kane 9 and benston et al 2 have made substantive contributions the authors demonstrates the way in which our current fixed rate insurance system rewards risk taking by the firm and insulates it through deposit insurance from the market discipline that needs to exist to ensure proper risk evaluation this realization has led these authors to propose a series of regulatory changes to encourage proper portfolio choice within the industry these include a shift to market value accounting risk based deposit insurance premiums and additional capital regulation the last of these serves as a method of coinsurance whereby higher capital levels require the bank to absorb greater losses in the event of failure and encourage additional prudence in management in essense it is one method of risk reduction that may offset the risk preference imposed on the industry due to the inappropriate insurance pricing because the amount of capital influences the probability of bank insolvency and thus the soundness of the entire banking system the regulators ceteris paribus prefer more capital to

land reform as commenced business the evidence against stopping abstract in the new paradigm institutions are long term endogenous thus the aims of land reform must be compatible with replace or substitute for initial incentives and power structures many reforms e g compulsory collectives are not redefinition of land reform is therefore needed yet the case for private land redistribution with ceilings remains the inverse relationship rests firmly on lower cost labor transactions in small farms though large but competitive transport or processing firms which enjoy lower cost capital transactions may be needed crucial is the impact of the postreform structure on livelihoods especially for the growing rural majority near landless workers new style market based reforms have potential probably best combined with old style ceilings substantial compensation with urban taxpayers sharing costs alternative off farm prospects and progressive taxes on large landholdings or bequests

looking beyond national boundaries regional harmonization of seed policies laws and regulations countries in west eastern and southern africa are pursuing the regional harmonization of their seed laws and regulations common regulatory frameworks are expected to reduce the costs of trading seed and encourage scale economies in seed production as a result commercial seed production is expected to expand providing farmers with improved access to new varieties and stimulating productivity growth the impact of these harmonization efforts will depend on the details of the regulatory agreements policy makers are being asked to consider a complicated series of trade offs between stricter measures for quality control and the need to encourage the multiplication and distribution of lower cost seed they are also being confronted with two possible views of sectoral development one view entails the pursuit of better linkages between distinct national seed markets the second involves the development of truly regionalized seed markets where seed can be readily produced in one country and sold in any other country this implies greater regional interdependence of seed supply the paper compares the harmonization agreements being pursued in each of the three african regions and progress in implementing the accords efforts to adapt international seed market standards to the contingencies of african markets are discussed and priorities for further policy analysis are identified

the role of warehouse receipt systems in enhanced commodity marketing and rural livelihoods in africa most african countries have since the 1980s liberalised agriculture without experiencing food crisis as feared by sceptics but the outcome of reforms has been rather disappointing and agricultural markets remain underdeveloped and inefficient one means to improve agricultural marketing which is the focus of this paper is to develop regulated warehouse receipt wr systems the system will curtail cheating on weights and measures ease access to finance at all levels in the marketing chain moderate seasonal price variability and promote instruments to mitigate price risks it will also reduce the need for the government to intervene in agricultural markets and reduce the cost of such interventions if needed the major problem in establishing wr systems in africa is disabling elements in the policy environment drawing on experience from projects implemented in africa during the last decade 1 the authors outline how this challenge can be addressed the most crucial being to build strong stakeholder support behind the initiative 2002 elsevier science ltd all rights reserved

multi battle contests abstract we study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests players may win a prize for winning each component contest as well as a prize for winning the overall race each component contest is an all pay auction with complete information we characterize the unique subgame perfect equilibrium analytically and demonstrate that it exhibits endogenous uncertainty even a large lead by one player does not fully discourage the other player and each feasible state is reached with positive probability in equilibrium pervasiveness expected effort in the component contests may be non monotonic in the closeness of the race and realized individual effort may exceed the value of the prize by a factor that is proportional to the maximum number of stage victories required

contractual arrangements between farmer cooperatives and buyers in china the agrofood market in china is dominated by spot market exchanges of small farmers and various small traders with only minor penetration of the modern supply chain at the farmgate the emerging farmer professional cooperatives fpcs are expected to facilitate vertical coordination the overall goal of this study is to investigate the contractual arrangements between the fpcs and the buyers based on a national representative survey of 157 fpcs in china this study shows that 32 of fpcs introduced written contracts in the primary marketing channel contracts are more likely to be adopted in the livestock sector and are positively related to the scale of production while branding promotes contracts between fpcs and buyers public certification of quality and food safety often substitutes for contracts furthermore the membership heterogeneity of fpcs affects an fpc s decision to use contractual arrangements with the buyer

the future of small farms trajectories and policy priorities summary while smallholder development has in the past led to reductions in poverty and hunger does this still apply in today s more globalized world this paper reviews the debates on the contemporary role of agriculture in development and the case for small farms in light of the rise of supermarkets lower commodity prices and liberalized trade agricultural research funding environmental change hiv aids and changing policy ideas although the answers vary greatly by context for many low income countries smallholder development remains a key option the policy agenda however has changed in addition to providing public goods the growing challenge is to overcome market failures which is largely a matter of institutional innovation

modeling the banking firm a survey this paper reports on the status of the literature on micro bank modeling and assesses our understanding of the banking firm s optimal behavior this is no mean task for much has been written on banking broadly defined over the past couple of decades the review is developed in pieces each major subproblem is outlined and the analysis used to deal with the issue explicated this is not the best way to summarize the development of a field it should be immediately recognized one would prefer to have a smooth continuum of development moving the frontier of knowledge evenly through time and across subareas yet this is rarely the way a field develops more likely individual questions attract attention and are the subjects of a substantial number of contributions after a time the field moves on to the new area of interest the banking field is no exception before embarking upon the review however a couple of lines should be devoted to previous attempts there have been essentially three first pyle 1972 analyzes the uncertainty portfolio models at a time when little existed in the literature and hence one finds the review a bit vague and sketchy baltensperger s contributions 1978 1980 are the next serious and rather extensive reviews the quality of these

interest rates and bank portfolio adjustments abstract we test empirically to determine if the relation between banks portfolio of assets and liabilities and interest rate is stable several possible causes of instability are considered the econometric techniques employed allow for continuous change in the structure of the empirical model in all cases stability of the model is strongly rejected we find that the portfolio interest rate relationship depends on the level of interest rates and exogenous assets as well as their rate and direction of change

legislative bargaining with a stochastic surplus and costly recognition abstract merging eraslan and merlo 2002 and yildirim 2007 i examine legislative bargaining with a stochastic surplus and costly recognition i show the uniqueness of the symmetric stationary payoff under monotone hazard rate and an inefficiently early agreement under unanimity

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

imperfect information screening and the costs of informal lending a study of a rural credit market in pakistan many governments have perceived the rural moneylender as usurious this article takes a first step toward directly testing the validity of this view in a study of services costs and charges of fourteen informal market moneylenders and their clients in chambar pakistan the article examines whether the high implicit interest rates charged reflect the actual costs of operating in that market estimates of the resource costs incurred by informal lenders for screening pursuing delinquent loans overhead and cost of capital including unrecoverable loans suggest that lenders charges are equal to their average cost of lending but exceed their marginal cost this finding is consistent with the view that the informal credit market is characterized by excess capacity and monopolistic competition in the presence of imperfect information

all pay contests this paper studies a class of games all pay contests which capture general asymmetries and sunk investments inherent in scenarios such as lobbying competition for market power labor market tournaments and r d races players compete for one of several identical prizes by choosing a score conditional on winning or losing it is weakly better to do so with a lower score this formulation allows for differing production technologies costs of capital prior investments attitudes toward risk and conditional and unconditional investments among others i provide a closed form formula for players equilibrium payoffs and analyze player participation a special case of contests is multiprize complete information all pay auctions

cash cropping and food crop productivity synergies or trade offs the case for promoting export oriented cash crops in africa has generally been based on their direct potential contribution to agricultural productivity and small farmer incomes a relatively neglected avenue of research concerns the synergistic effects that cash cropping can have on other household activities including food production the conventional view that cash crops compete with food crops for land and labour neglects the potential for cash crop schemes to make available inputs on credit management training and other resources that can contribute to food crop productivity which might otherwise not be accessible to farmers if they did not participate in cash crop programs this article builds on previous research by hypothesising key pathways by which cash crops may affect food crop activities and empirically measuring these effects using the case of cotton in gokwe north district in zimbabwe analysis is based on instrumental variable analysis of survey data on 430 rural households in 1996 results indicate that after controlling for household assets education and locational differences households engaging intensively in cotton production obtain higher grain yields than non cotton and marginal cotton producers we also find evidence of regional spill over effects whereby commercialisation schemes induce second round investments in a particular area that provide benefits to all farmers in that region regardless of whether they engage in that commercialisation scheme the study suggests that the potential spill over benefits for food crops through participation in cash crop programs are important to consider in the development of strategies designed to intensify african food crop production

proposal power and majority rule in multilateral bargaining with costly recognition this paper studies a sequential bargaining model in which agents expend efforts to be the proposer in equilibrium agents effort choices are influenced by the prize and cost effects the endogenous prize is 9

distribution of surplus in sequential bargaining with endogenous recognition i examine a sequential bargaining situation in which agents contest the right to propose an allocation the contest can either take place at a pre bargaining stage yielding persistent recognition to propose or recur throughout the bargaining yielding transitory recognition equilibrium analysis reveals that surplus is distributed more unequally under persistent recognition social cost is higher under persistent recognition if and only if it attracts a sufficient number of active bargainers and individual s incentive to propose under transitory recognition may actually increase in the number of agents while this incentive always diminishes under persistent recognition

expanding access to agricultural inputs in africa a review of recent market development experience abstract this paper asks what can be done to expand input use in africa and can it be done in a manner that supports continued growth of private sector input markets the precarious food security situation in many african countries has prompted governments and donors to use input distribution or credit programs as a means of rapidly increasing food supply for the poor these efforts however often reduce the ability of input market development programs to stimulate commercial interest in input supply a review of both types of programs describes recent efforts to address constraints to expanded input use and finds that further expansion is often constrained by inadequate investment in a variety of public goods needed to stimulate input led agricultural intensification rather than continuing to invest resources in programs to provide inputs or credit directly to farmers governments with donor assistance should consider shifting their focus to the serious deficiencies in the provision of public goods roads irrigation basic education market information systems research and extension and improved institutions contract law and enforcement systems of grades and standards improvements in these areas can both lower costs of supply and increase farm level demand creating a situation where the private sector will have greater incentives to expand input distribution networks to zones and farmers who currently do not have access

economic and ecological trade offs of agricultural specialization at different spatial scales specialization in agricultural systems can lead to trade offs between economic gains and ecosystem functions we suggest and explore a conceptual framework in which economic gains can be maximized when production activities are specialized at increasingly broader scales from the household to the village region or above particularly when markets for outputs and inputs function well conversely more specialization likely reduces biodiversity and significantly limits ecosystem functions when agricultural specialization increases and moves to broader scales as a result of improved infrastructure and markets or other drivers ecosystem functions can also be endangered at broader spatial scales policies to improve agricultural incomes may influence the level of specialization at different scales and thus affect the severity of the trade offs this paper takes jambi province in indonesia a current hotspot of rubber and oil palm monoculture as a case study to illustrate these issues we empirically show that the level of specialization differs across scales with higher specialization at household and village levels and higher diversification towards the province level we discuss ways to resolve trade offs between economic gains and ecological costs including landscape design targeted policies and adoption of long term perspectives

institutional arrangements in the emerging biodiesel industry case studies from minas gerais brazil connecting small family farmers to the emerging biodiesel industry requires careful design of the institutional arrangements between the producers of oil crops and the processing companies according to institutional economics theory the design of effective and efficient arrangements depends on production and transaction characteristics the institutional environment and the organizational environment supporting the transaction between producers and the industry this paper presents a comparative study on two cases in the feedstock for biodiesel industry in the state of minas gerais brazil the two case studies represent the production and transaction system of soybeans glycine max l merrill and castor beans ricinus communis l important elements of effective and efficient institutional arrangements are farmer collective action availability of technical and financial support and farmer experience with particular crops

false promise or false premise the experience of food and input market reform in eastern and southern africa abstract the literature on the effects of agricultural market reform in africa is sharply divided and inconsistent this article attempts to reconcile opposing viewpoints on the effects of food and input market policy reform in eastern and southern africa drawing from studies of ethiopia kenya malawi zambia and zimbabwe we argue that a major source of the controversy stems from assumptions that countries have actually moved to a liberalized market environment we find that many of the most fundamental elements of the reform programs either remain unimplemented were reversed within several years or were implemented in such a way as to negate private sector investment incentives a framework is developed for explaining why some countries have been able to liberalize their food and fertilizer markets while others have not these findings have implications for how donor assistance and policy oriented research can more constructively contribute to an improved policy environment

the macroeconomic implications of financial deregulation abstract this paper explores the possible macroeconomic consequences of financial deregulation in an institutional environment where deregulation raises risks in banking the central bank is supposed to maximize an objective function in which the probability of bank failure is an argument it is then shown that the usual tradeoffs between policy objectives imply that financial deregulation will lead to more interest rate smoothing than would otherwise take place and further that because of restricted entry into banking deregulation will call for some inflation the transition toward deregulation raises special problems which are likely to require a more gradual approach toward the stationary equilibrium

social desirability opportunism and actual support for farmers market organisations in ethiopia one of the striking issues in the literature on farmers market organisations fmos is that farmers generally report quite positive opinions regarding the services of their fmo while at the same

innovation grants to smallholder farmers revisiting the key assumptions in the impact pathways grant funds specifically targeted to smallholder farmers to facilitate innovation are a promising agricultural policy instrument they stimulate smallholders to experiment with improved practices and to engage with research extension and business development services providers however evidence on impact and effectiveness of these grants is scarce partly because attribution of changes in practices and performance to the grant alone is challenging and the grant is often invested in innovation processes that benefitted from other support in the past we discuss three modalities vouchers business development matching grants and farmer driven innovation support funds our review points to an important and transversal outcome area of innovation grant systems the creation of human and social capital to sustain creative thinking and innovative practices harmonising measurement on these outcomes could enhance the usefulness and comparability of impact studies and facilitate benchmarking of different policy options for smallholder innovation

a noncooperative theory of coalitional bargaining the authors explore a sequential offers model of n person coalitional bargaining with transferable utility and with time discounting their focus is on the efficiency properties of stationary equilibria of strictly superadditive games when the discount factor delta is sufficiently large it is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium the latter for some or all orders of proposer however efficient stationary equilibrium payoffs converge to a point in the core as delta approaches one strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high delta

the health of farmer based organisations in ghana organisational diagnostics and governance implications abstractin this paper we use primary data on 500 ghanaian fbos collected through semi structured interviews and risky dictator games rdg to test the validity of the cooperative life cycle theory and formulate a measure of cooperative health we first define cooperative health as the alignment of heterogeneity in risk preferences and the effectuation of collective investments we then use cluster and correlation analysis to categorize fbos on the basis of their health and correlate these typologies with various performance indicators our findings reveal that organizational health is generally low as there are only a few organizations that manage to provide member farmers with both risk sharing and cost saving opportunities further healthier fbos experience stronger growth in membership while health is lower in fbos that have been established for the purpose of benefitting from external incentives

level playing fields and laissez faire postliberal development strategy in inegalitarian agrarian economies focusing on the rural sector in latin america this paper explores the microeconomic linkages between distribution and growth which drive the possible reproduction of rural poverty over time the result of this exploration is a neostructuralist perspective which argues that actually existing laissez faire agrarian economies do not present a level playing field and that low wealth farms face disadvantages which tend to reproduce or even deepen sectoral inequality the paper then tries to identify the sorts of public policy and collective action which might modify the nature of growth and distribution in post liberalization agrarian market economy

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

collective action for smallholder market access abstract the opportunity for smallholders to raise their incomes increasingly depends on their ability to compete in the market yet there are many failures in rural markets in developing countries that make it difficult for them to do this understanding how collective action can help address the inefficiencies coordination problems or barriers to market access is particularly important this paper draws on the case studies in this special issue and on other literature to examine the conceptual issues and empirical evidence on the role of collective action institutions in improving market access for the rural poor applying insights from studies of collective action in natural resource management the paper examines what conditions facilitate effective producer organizations for smallholders market access with special attention to the characteristics of user groups institutional arrangements types of products staples perishables and other commodities markets local domestic and international and external environment the paper also identifies policies and interventions that facilitate collective action for market access among smallholders and examines whether the public sector private sector and or civil society is best positioned to provide such interventions

the future of small farms new directions for services institutions and intermediation summary efficient pre and post harvest services are essential if small farms in high potential areas are to intensify production contribute to economic growth and reduce poverty they also matter if small farms in marginal areas are to manage their natural resource base in the face of growing population pressure and climate change difficulties that smallholders face in accessing services are reviewed showing how incentives for commercial delivery of services to smallholders differ between staple food traditional cash crop and high value product supply chains the major challenge in service delivery to smallholders in much of africa concerns coordination of service development and delivery different forms of intermediary institution for achieving such coordination are examined

a note on the intracyclical balance sheet behavior of large commercial banks 1972 1978 using a parkin type model this paper tests for the responsiveness of large banks portfolio decisions to exogenous factors over the period 1972 to 1978 based upon aggregate weekly data adjusted for first order autocorrelation and a restricted least squares estimation procedure the empirical results indicate significant differences in behavior i e structural changes over the business cycle previous studies have implicitly assumed that such behavior is constant over the cycle or that differences over the cycle are not significant this research shows that the assumption is untenable and that the differences over the cycle are statistically significant since these patterns vary over the business cycle the differences should be incorporated into models of bank balance sheet behavior to avoid misleading interpretations and implications

capital regulation and insured banks choice of individual loan default risks abstract how bankers choose the riskiness of their individual assets is an important question it is well known that fixed premium deposit insurance leads a bank to prefer a high variance asset portfolio but its effect on individual asset choice has not been carefully evaluated this paper demonstrates how bank examination procedures and capital adequacy standards can make the value of a bank s deposit insurance contract concave in individual asset risks insured bankers may therefore have a rational preference ceteris paribus for relatively safe individual loans even while they prefer risky portfolio returns the model s implications for loan securitization and the federal regulators new risk based capital standards are discussed

many borrow more save and all insure implications for food and micro finance policy abstract among policy makers researchers and micro finance practitioners alike there is much discussion on the role of micro finance for alleviation of poverty this paper focuses on the linkages between access to credit savings and insurance services and household food security what is the role of micro finance in the overall mix of policy instruments what types of financial services are demanded by the poor and which are offered by micro finance institutions mfis hence which are the gaps in financial products we present a conceptual framework that addresses these questions and provide a synthesis of the empirical results of a multi country research program in ten african and asian countries we conclude that insurance can be considered as the missing third of micro finance during the 1990s and that the mfi s outreach to the poor can be improved by offering savings credit and insurance products that enhance the poor s ability to bear risks applied research on the poor s preferences as well as bold experimentation with new financial products appear to be particularly promising in making progress towards that goal since insurance services are difficult to be offered except for easily observable idiosyncratic risks precautionary savings services can be a valuable insurance substitute in particular for the poorest

recognition for sale abstract i examine the consequences of letting players compete for bargaining power in a multilateral bargaining game in each period the right to propose an offer is sold to the highest bidder and all players pay their bids if players vote according to any rule in which no player has veto power then the first proposer captures the entire surplus if a full consensus is needed for an offer to be accepted then the first proposer shares the surplus with at most one other player and as the period length between offers vanishes one player may capture virtually the entire surplus in settings with a stochastic or an endogenous surplus players are unwilling to efficiently delay agreement or invest in the surplus

seniority in legislatures we construct a stochastic game model of a legislature with an endogenously determined seniority system we model the behavior of the legislators as well as their constituents in an infinitely repeated divide the dollar game each legislative session must make a decision on redistributional issues modeled as a divide the dollar game however each session begins with a vote in which the legislators decide by majority rule whether or not to impose on themselves a seniority system legislative decisions on the redistributional issues are made by the baron ferejohn rule an agenda setter is selected by a random recognition rule which in our model is a function of the seniority system selected the agenda setter makes a proposal on redistributional issues and the legislature then votes whether to accept or reject the agenda setters proposal if the legislature rejects the proposal another agenda setter is randomly selected and the process is repeated if the legislature accepts the proposal the legislative session ends and the voters in each legislative district vote whether to retain their legislator or throw it out of office the voters verdict determines the seniority structure of the next period legislature we find a stationary equilibrium to the game having the property that the legislature imposes on itself a non trivial seniority system and that legislators are always reelected