are impatient farmers more risk averse evidence from a lab in the field experiment in rural uganda based on data from a field experiment in rural uganda we show that impatient farmers are more risk averse than patient farmers we relied on a simplified version of the convex time budget ctb method to elicit farmers time preferences and on an independent method for eliciting their risk preferences we report two important findings first we show that our simplified ctb method applied to farmers from uganda replicates the key findings of andreoni and sprenger s lab experiments that involved student subjects second we establish the existence of a negative correlation between risk tolerance and impatience based on two independent measures

wealth effects in the principal agent model abstract this paper addresses the question of how the principal s surplus and agency costs depend on the agent s wealth our main results are that if the agent has an additively separable utility function in income and effort and his degree of absolute prudence is smaller than three times the agent s degree of absolute risk aversion then the principal s expected pay off is smaller the richer the agent for general utility functions this result also holds if the first order approach is applicable and one further technical assumption is satisfied if however the participation constraint does not bind then richer agents are cheaper journal of economic literature classification numbers d82 g3 j33

a theory of voting equilibria a voting equilibrium arises when the voters in an electorate acting in accordance with both their preferences for the candidates and their perceptions of the relative chances of various pairs of candidates being in contention for victory generate an election result that justifies their perceptions voting equilibria always exist and the set of equilibria can vary substantially with the choice of voting system we compare equilibria under the plurality rule approval voting and the borda system we consider a candidate positioning game and find that the plurality rule imposes little restriction on the position of the winning candidate in three candidate races while approval voting leads to a winner positioned at the median of the voter distribution we contrast campaign activities intended to influence voter preferences with activities meant to influence only perceptions of candidate viability

electoral competition in heterogeneous districts this paper considers a model of elections in which parties compete simultaneously for multiple districts i show that if districts are heterogeneous then a unique two party equilibrium exists under plurality rule in which further entry is deterred the equilibrium requires that parties choose noncentrist policy platforms and not converge to the ideal policy of the median voter these characteristics are consistent with empirical observation in contrast to those of single district models necessary and sufficient conditions for the existence of the equilibrium are then characterized and related to duverger s law the existence of multiple party equilibria in this environment is also considered

going digital credit effects of land registry computerization in india digitization of land records represents a unique way to test for credit supply effects of improved land administration information over time the authors exploit variation in the timing of the shift from manual to digital operation of andhra pradesh s 387 sub registry offices during the state wide rollout of this intervention from 1999 to 2005 data on credit disbursement and registered mortgages for the 1995 2007 period point to significant though quantitatively modest increases in credit access in urban areas institutional factors allow the authors to explain these results

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

partisan politics and election failure with ignorant voters abstract we analyze candidate competition when some voters do not observe a candidate s policy choice voters have a personality preference when both candidates offer the same policy in equilibrium the candidate with a personality advantage may get elected with a partisan policy even though his opponent s policy is preferred by all voters the departure from the downsian prediction is most pronounced when candidates have a weak policy preference and care mostly about winning the election in that case uninformed voters choose the candidate with the preferred personality even if electing this candidate implies a lower payoff on average

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

spatial equilibrium with entry this paper examines spatial equilibrium in political competition when established parties choose their platforms competitively while rationally anticipating entry of a vote maximizing third party the resulting equilibrium is substantially different from the hotelling median equilibrium established parties are spatially separated and third parties will generally lose the election this provides one theoretical explanation for the stability of two party systems namely that non cooperative behavior between established parties can effectively prevent third parties from winning

political competition between differentiated candidates abstract we introduce a framework of electoral competition in which voters have general preferences over candidates immutable characteristics such as gender race or previously committed policy positions as well as their policy positions which are flexible candidates are uncertain about the distribution of voter preferences and choose policy positions to maximize their winning probability we characterize a property of voter utility functions uniform candidate ranking ucr that captures a form of separability between fixed characteristics and policy when voters have ucr preferences candidates equilibrium policies converge in any strict equilibrium in contrast notions like competence or complementarity lead to non ucr preferences and policy divergence in particular we introduce a new class of models that contains the probabilistic voting model as a special case and in which there is a unique equilibrium that generically features policy divergence

social ideology and taxes in a differentiated candidates framework many observers argue that political polarization particularly on social and cultural issues has increased in the united states how does this influence the political competition on economic issues we analyze this question using a framework in which two officemotivated candidates differ in their fixed ideological position and choose a level of government spending to maximize their vote share in equilibrium candidates cater to a set of swing voters who contain socially conservative and economically liberal voters as well as socially liberal and economically conservative voters we analyze how voters cultural preferences and candidates cultural positions influence equilibrium economic positions jel d72 e62 h50 z13 many observers have argued that polarization between the two major parties in the united states particularly on noneconomic cultural matters has increased this is reflected both at the elite level in particular in congress poole and rosenthal 1984 1985 2000 and among democratic and republican activists and voters abramowitz and saunders 2008 harbridge and malhotra 2011 in the american national election survey respondents report their own ideological position on a scale from 1 very liberal to 7 very conservative the number of respondents who report one of the extreme positions 1 2 6 or 7 has grown from 20 and 21 percent in 1972 and 1976 to 31 and 30 percent in the 2004 and 2008 respectively moreover liberal and conservative voters have become considerably more reliable supporters of democrats and republicans respectively over the last generation 1 if we accept the widespread view that reagan s conservative revolution has created a cultural wedge between the parties that only widened in the 1990s and 2000s what consequences for the parties economic policies should we expect

why vote for losers voting theory generally concludes that in first past the post elections all votes should go to effective candidates duverger s law and parties should adopt a similar platform median voter theorem however such predictions are not always met in practice we show why divergence and vote dispersion is a natural outcome when a parties are opportunistic b there is uncertainty on the position of the median voter and c elections are repeated voting for losers increases the informational content of elections and may induce mainstream parties to relocate towards extremists as a result to maximize their probability of being elected they do not adopt median

coarse thinking and persuasion we present a model of uninformative persuasion in which individuals think coarsely they group situations into categories and apply the same model of inference to all situations within a category coarse thinking exhibits two features that persuaders take advantage of i transference whereby individuals transfer the informational content of a given message from situations in a category where it is useful to those where it is not and ii framing whereby objectively useless information influences individuals choice of category the model sheds light on uninformative advertising and product branding as well as on some otherwise anomalous evidence on mutual fund advertising

hedonic price indexes for residential housing a survey evaluation and taxonomy every house is different it is important that house price indexes take account of these quality differences hedonic methods which express house prices as a function of a vector of characteristics such as number of bedrooms and bathrooms land area and location are particularly useful for this purpose i consider here some developments in the hedonic methodology as it is applied in a housing context that have occurred in the last three decades a number of hedonic house price indexes are now available however it is often difficult to see how these indexes relate to each other for this reason i attempt to impose some structure on the literature by developing a taxonomy of hedonic indexes and then show how existing indexes fit into this taxonomy also discussed are some promising areas for future research in the hedonic field in particular greater use needs to be made of spatial econometric and nonparametric methods to exploit the increased availability of geospatial data the main criticisms of the hedonic approach are evaluated and compared with those of the repeat sales and stratified median methods the overall conclusion is that the advantages of the hedonic approach outweigh its disadvantages

where and how index insurance can boost the adoption of improved agricultural technologies abstract remote sensing and other advances have led to an outpouring of programs that offer index insurance to small scale farmers with the expectation that this insurance will enable adoption of improved technologies and boost living standards despite these expectations the evidence to date on the uptake and impacts of insurance is mixed this paper steps back and considers theoretically where index insurance might be most effective and whether it should be offered as a standalone contract or explicitly interlinked with credit contracts emerging from this analysis is a set of nuanced recommendations based on the structure of risk and the property rights collateral environment

credit constraints credit unions and small scale producers in guatemala abstract efficient and equitable development outcomes may depend in part on whether formal financial institutions leave low wealth producers tightly constrained in their access to credit if so can cooperative institutions efficiently relax these constraints these issues are explored using survey data gathered from 950 small scale producer households in areas of guatemala with market oriented credit unions that mobilize savings and make unsubsidized loans nonprice rationing by banks is found to be common among lower wealth households while credit unions relax credit constraints for a significant portion of those rationed by banks but not the poorest of the study households

credit constraints and productivity in peruvian agriculture this article evaluates the performance of a rural credit market in peru we develop a model that shows that collateral requirements imposed by lenders in response to asymmetric information can lead not just to quantity rationing but also to transaction cost rationing and risk rationing just like quantity rationing these two additional forms of nonprice rationing adversely affect farm resource allocation and productivity we test the insights of the model using a panel data set from northern peru we estimate the returns to productive endowments for constrained and unconstrained households using a switching regression model we find that consistent with the theory productivity is independent of endowments for unconstrained households but is tightly linked to endowments for constrained households we estimate that credit constraints lower the value of agricultural output in the study region by 26

a model of political equilibrium in a representative democracy abstract this paper studies political equilibrium in a two party representative democracy in which the political parties are policy motivated and voters trade off their policy preferences against their party identity it is shown that the parties will in general adopt differing policy positions in equilibrium and that under certain qualifications the winning policy will lie between the more popular party s preferred policy and a certain utilitarian optimum the winning policy will be closer to this utilitarian optimum the less biased the electorate is in terms of party identification

an analysis of offer functions of banks and credit unions in guatemala economists have sought to identify institutions which might fill the gap in household access to credit arising from rationing by formal lenders credit unions have been identified as institutions which might use informational and monitoring advantages to fill that gap using information on household perceptions of their access to credit this article analyses the impact of certain credit unions on the access to credit of households in guatemala regression results indicate that credit unions serve markets unserved by formal lenders and that information on household perceptions of their access to credit is important in making inferences about lender lending activities

the binary policy model abstract we introduce a model of electoral competition with office motivated candidates who are exogenously committed to particular positions on some issues while they choose positions for the remaining issues a position is majority efficient if a candidate cannot make a majority of the electorate better off given his fixed positions we characterize existence conditions for majority efficient positions the candidates fixed positions in our framework imply that only some voters are swing voters and we analyze how the distribution of swing voters determines whether candidates choose majority efficient positions we also analyze plurality and runoff elections with multiple candidates in our framework

the impact of market friendly reforms on credit and land markets in honduras and nicaragua summary this article explores the impacts on credit access and agrarian structure of land market liberalization policies undertaken in honduras and nicaragua during the 1990s like liberalization efforts pursued in many latin american countries these market friendly reforms were designed to activate land transfers and enhance agricultural efficiency in large part by improving the access of the rural poor to both credit and land markets panel data sets gathered in honduras and nicaragua are used to compare title credit and land access patterns before and after the reforms descriptive nonparametric regression analyses show that despite major gains in titling across the land size spectrum and some increase in land market activity the other hoped for improvements in credit and land access did not occur and appear unlikely to occur without further policy attention to credit markets

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

risk wealth and sectoral choice in rural credit markets we model the role of the informal credit sector in developing countries the informational advantage of informal lenders is portrayed as the ability to monitor borrowers monitoring reduces the incentive problem and allows for contracts with lower collateral this enables informal lenders to serve both individuals who cannot post the collateral required by the formal sector and those who are able but do not want to post collateral the model is consistent with the conventional view of the informal sector as recipient of spillover demand from the formal sector it also shows that the informal sector may provide partial insurance as the lower collateral requirement implies greater consumption smoothing for borrowers

candidate competition and voter learning in the 2000 2012 us presidential primaries when candidates in primary elections are ideologically differentiated e g conservatives and moderates in the republican party then candidates with similar positions affect each others vote shares more strongly than candidates with different ideological positions we measure this effect in us presidential primaries and show that it is of first order importance we also show that voters beliefs about the candidates harden over the course of the primary as manifested in the variability of candidate vote shares we discuss models of sequential voting that cannot yield that pattern of results and propose an explanation based on a model with horizontally and vertically differentiated candidates and incompletely informed voters consistent with the predictions of this model we also show that in more conservative states low quality conservative candidates do better relative to high quality conservatives and vice versa

does land titling improve credit access quasi experimental evidence from rural china based on official surveys conducted in 2010 and 2015 we study how the chinese land titling reform beginning in 2009 affected rural households access to credit we find that the reform had differe

credit constraints and agricultural productivity evidence from rural rwanda while potentially negative impacts of credit constraints on economic development have long been discussed conceptually empirical evidence for africa remains limited we use a direct elicitation approach on a national sample of rwandan rural households to empirically assess the extent and nature of credit rationing in the semi formal sector and its impact using an endogenous switching model elimination of all constraints could increase output by some 17 per cent implications for policy and research are spelled out

community based risk management arrangements a review summary risk and its consequences pose a formidable threat to poverty reduction efforts this article reviews a plethora of community based risk management arrangements across the developing world these types of arrangements are garnering greater interest in light of the growing recognition of the relative prominence of household or individual specific idiosyncratic risk as well as the increasing shift towards community based development funding the article discusses potential advantages such as targeting cost and informational and disadvantages such as exclusion and inability to manage correlated risk of these arrangements and their implications for the design of community based social protection programs and policies

competition between specialized candidates opposing candidates for a political office often differ in their professional backgrounds and previous political experience leading to both real and perceived differences in political capabilities we analyze a formal model in which candidates with different productivities in two policy areas compete for voters by choosing how much money or effort they would allocate to each area if elected the model has a unique equilibrium that differs substantially from the standard median voter model although candidates compete for the support of a moderate voter type this cutoff voter differs from the expected median voter moreover no voter type except the cutoff voter is indifferent between the candidates in equilibrium the model also predicts that candidates respond to changes in the preferences of voters in a very rigid way from a welfare perspective candidates are excessively moderate almost certainly a majority of voters would prefer that the winning candidate focus more on his or her strength

collateral free lending with risk contingent credit for agricultural development indemnifying loans against pulse crop price risk in india this article addresses the problem of collateral free lending in the context of agricultural development we investigate a viable alternative to traditional credit products through the development of risk contingent credit for operating loans and farm mortgages and apply the concept to agricultural loans for pulse crops in india risk contingent credit mitigates business and financial risk by reducing debt obligations depending on the embedded commodity options whose payoffs are linked with commodity price fluctuations we analyze daily commodity spot prices for pulse crops in india and show how risk contingent structured financial instruments can be priced in practice

insurance credit and technology adoption field experimental evidence from malawi this brief summarizes the insurance credit and technology adoption field experimental evidence from malawi the farmers were offered loans for the november 2006 planting season does production risk suppress the demand for credit the author implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology the study sample was composed of roughly 800 maize and groundnut farmers in malawi where by far the dominant source of production risk is the level of rainfall the author randomly selected half of the farmers to be offered credit to purchase high yielding hybrid maize and groundnut seeds for planting in the november 2006 crop season the other half of farmers were offered a similar credit package but were also required to purchase at actuarially fair rates a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall surprisingly take up was lower by 13 percentage points among farmers offered insurance with the loan take up was 33 0 percent for farmers who were offered the uninsured loan there is suggestive evidence that reduced take up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract insured loan take up was positively correlated with farmer education income and wealth which may proxy for the individual s default costs by contrast take up of the uninsured loan was uncorrelated with these farmer characteristics

elections with privately informed parties and voters this paper studies a situation in which parties are betterinformed than voters about the optimal policies for voters weshow that voters are able to infer the parties information byobserving their electoral positions even if parties have policypreferences which differ substantially from the median voter s unlike previous work that reach opposite conclusions we assumethat voters have some private information of their own if theinformation available to voters is biased parties attempts toinfluence voters beliefs will result in less than fullconvergence even if parties know with certainty the optimalpolicy for the median voter

learning and coordination in the presidential primary system in elections with three or more candidates coordination among like minded voters is an important problem we analyze the trade off between coordination and learning about candidate quality under different temporal election systems in the context of the u s presidential primary system in our model candidates with different policy positions and qualities compete for the nomination and voters are uncertain about the candidates valence this setup generates two effects vote splitting i e several candidates in the same policy position compete for the same voter pool and voter learning as the results in earlier elections help voters to update their beliefs on candidate quality sequential voting minimizes vote splitting in late districts but voters may coordinate on a low quality candidate using the parameter estimates obtained from all the democratic and republican presidential primaries during 2000 2012 we conduct policy experiments such as replacing the current system with a simultaneous system adopting the reform proposal of the national association of secretaries of state or imposing party rules that lead to candidate withdrawal when pre specified conditions are met

land inheritance and market transactions in uganda studies on the role of nonmarket land transactions remain limited this paper addresses two questions is land inheritance driven by underdeveloped land markets how does land inheritance influence land disposal and acquisition we use a switching regression model on household data from rural uganda we find that the initially landless or near landless households due to little or no land inheritance obtain land through land markets while those that are land rich dispose of land through land sales and bequests the results suggest that a process of land equalization is unfolding within the sample

general equilibrium tragedy of the commons many poor economies depend on open access resources for their livelihoods households in resource based economies allocate their time and other factors between resource extraction and other activities as a result factors may shift from one sector to another as marginal returns change this has two important implications first it implies potentially strong linkages between resource and non resource sectors second it means that unmanaged resources cause inefficient allocations of inputs across all sectors and the effects of resource management spill into other sectors we construct a local general equilibrium model that accounts for inputs that over allocate to an open access resource and create a general equilibrium tragedy of the commons this model describes resource rent dissipation more adequately in economies with mobile factors than a model with slowly dissipating rents perfectly mobile factors dissipate rent in every period but endogenous wages cause labor and capital allocations to change with the resource stock we use the model to illustrate medium run impacts of a limit on capital in an artisanal fishery in honduras simulation results reveal that fishery management has economy wide impacts on prices and wages managers in developing countries thus should consider these linkages when implementing policies to conserve fish stocks

a model of candidate location when one candidate has a valence advantage that under some fairly weak assumptions for all levels of the valence advantage the advantaged candidate chooses a more moderate position than the disadvantaged candidate empirical studies of congressional elections by fiorina 1973 and ansolabehere snyder and stewart 2001 support this result d owns 1957 seminal work presents a puzzle for scholars of u s elections why do candidates not converge to the median voter one of the best explanations is that the candidates themselves have ideological preferences as calvert 1985 and wittman 1977 1983 have shown when candidates have such preferences and they are sufficiently uncertain about the preferences of the median voter then they do not converge although they may moderate their positions from their ideal point the basic version of the calvert wittman model however does not account for another basic fact of u s elections often one of the candidates has an advantage due to a nonpolicy factor such as incumbency greater campaign funds better name recognition superior charisma superior intelligence and so on stokes has dubbed such factors valence factors and he has noted their importance in u s elections stokes 1963 1992 1 in this article i extend the basic calvert wittman model by giving one candidate a valence advantage over the other i show that if the valence characteristics of the candidates are approximately equal then when a candidate s valence advantage increases this causes her to move toward the

outreach sustainability and leverage in monitored and peer monitored lending abstract i study the contract design problem facing microfinance lending organizations mfos that want to maximize the impact and outreach of their lending activities to a target population of poor borrowers while remaining financially sustainable tradeoffs between outreach sustainability and financial leverage are shaped by the endogenous monitoring and delegation costs that arise within a chain of agency relationships subject to moral hazard between borrowers loan staff mfo equity owners and outside investors all else equal sustainable mfos that target poorer borrowers must charge higher interest rates have higher staff costs per dollar loaned and are less leveraged analysis of data for 72 mfos tends to support the findings

risk credit constraints and financial efficiency in peruvian agriculture abstract based on a panel data set we use a two stage analysis to evaluate the effects of access to formal credit on financial efficiency of farms in northern peru the first stage uses non parametric data envelope analysis to estimate farm specific measures of financial efficiency 28 per cent of farmers are financially inefficient and credit constraints reduce profits of these farmers by an average of between 17 and 27 per cent the second stage uses tobit regression to evaluate the determinants of financial inefficiency the results point to uninsured risk as a key determinant of financial inefficiency and suggest that policies to strengthen agricultural insurance markets would likely pay large dividends in rural peru

voters private valuation of candidates quality abstract different voters might have different valuations of candidates qualitative features we argue that this intuitive fact acts as a strong stabilizing force in electoral competition dynamics when candidates are office motivated pure strategy equilibria may exist unlike when all voters favor the same candidate perhaps more importantly it affects candidates platform moderation incentives in a rather intriguing manner when voters are evenly split in terms of their candidates quality valuations then both candidates have incentives to locate sufficiently near but not necessarily exactly at the center of the policy space however as the number of voters who favor the same candidate rises maximum equilibrium differentiation follows a non trivial u shaped pattern it is first decreasing and then increasing in the fraction of voters who prefer the more popular candidate

direct elicitation of credit constraints conceptual and practical issues with an application to peruvian agriculture abstract this article provides a methodological bridge leading from the well developed theory of credit rationing to the less developed territory of empirically identifying credit constraints we begin by developing a simple model showing that credit constraints may take three forms quantity rationing transaction cost rationing and risk rationing each form adversely affects household resource allocation and thus should be accounted for in empirical analyses of credit market performance we outline a survey strategy to directly elicit households status as unconstrained or constrained in the credit market and if constrained to further identify which of the three nonprice rationing mechanisms is at play we discuss several practical issues that arise due to the use of a combination of factual and interpretative survey questions finally using a farm level data set from peru we illustrate how the methodology can be used to estimate the impacts of credit constraints

multidimensional electoral competition between differentiated candidates it is known that multidimensional downsian competition fails to admit an equilibrium in pure strategies unless very stringent conditions on the distribution of voters bliss points are imposed plott 1967 this paper revisits this problem considering that the two vote share maximizing candidates are dierentiated that is candidates strategically decide po sitions only in some of the n dimensions while in the rest their positions are assumed to be xed these xed dimensions may be viewed as candidates immutable characteristics race religion culture etc we nd that if candidates are su ciently dierentiated if in the xed dimensions their positions are su ciently dierent then a unique nash equilibrium in pure strategies is guaranteed to exist for any distribution of voters bliss points perhaps more importantly we show that this is true even if there exists a unique xed dimension and candidates instrumentally decide their positions in all other n 1 dimensions

signaling character in electoral competition we study a one dimensional hotelling downs model of electoral competition with the following innovation a fraction of candidates have character and are exogenously committed to a campaign platform this is unobservable to voters character is desirable and a voter s utility is a convex combination of standard policy preferences and her assessment of a candidate s character this structure induces a signaling game between strategic candidates and voters since a policy platform affects voters utilities not only directly but also indirectly through inferences about a candidate s character the model generates a number of predictions starting with a failure of the median voter theorem jel d72 d82

productivity credit risk and the demand for weather index insurance in smallholder agriculture in ethiopia the article explores the relationship between fertilizer use and the demand for weather index insurance wii among smallholder farmers in ethiopia we examine whether fertilizer use is profitable under current smallholder production conditions whether risk related factors affect fertilizer use and we estimate the returns to inputs in the agricultural production function in the absence of insurance we then study how these primitives of agricultural production functions relate to insurance demand the study compares a survey based estimate of willingness to pay with actual uptake for the weather insurance finding the stated and actual demand to be almost completely uncorrelated while those with high marginal returns to inputs say they would purchase insurance only those with low marginal returns actually do consistent with the stated purpose of the product as input insurance insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers jel classifications c83 g22 q12

agricultural workers credit rationing and family networks in rural mexico abstractwe use mixed methods and first hand household data in mexico to investigate credit practices by households engaged in agricultural wage employment quantitative analysis shows evidence of rationing in the formal sector but also suggests the existence of mitigating mechanisms qualitative analysis provides additional insights first income patterns associated with agricultural wage generate income smoothing needs that are sometimes better met by the informal sector second family networks can perform key functions as gateways to the formal sector through specific informal arrangements that inject flexibility into formal rules and procedures

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

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning

private polling in elections and voter welfare we study elections in which two candidates poll voters about their preferred policies before taking policy positions in the essentially unique equilibrium candidates who receive moderate signals adopt more extreme platforms than their information suggests but candidates with more extreme signals may moderate their platforms policy convergence does not maximize voters welfare although candidates platforms diverge in equilibrium they do not do so as much as voters would like we find that the electorate always prefers less correlation in candidate signals and thus private over public polling some noise in the polling technology raises voters welfare

risk rationing and wealth effects in credit markets theory and implications for agricultural development we develop a model that shows that asymmetric information can result in two types of credit rationing conventional quantity rationing and risk rationing whereby farmers are able to borrow but only under high collateral contracts that offer them lower expected well being than a safe subsistence activity after exploring its incidence with respect to wealth we show that risk rationing has important policy implications specifically land titling will be only partially effective because it does not enhance producers willingness to offer up the collateral needed to secure loans under moral hazard constraints efforts to enhance agricultural investment and the working of agricultural credit markets must step beyond land titling and also deal with risk copyright 2008 oxford university press