some empirical evidence on the effects of shocks to monetary policy on exchange rates this paper investigates the effects of shocks to u s monetary policy on exchange rates we consider three measures of these shocks orthogonalized shocks to the federal funds rate orthogonalized shocks to the ratio of nonborrowed to total reserves and changes in the romer and romer index of monetary policy in sharp contrast to the literature we find substantial evidence of a link between monetary policy and exchange rates specifically according to our results a contractionary shock to u s monetary policy leads to i persistent significant appreciations in u s nominal and real exchange rates and ii significant persistent deviations from uncovered interest rate parity in favor of u s interest rates

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

immiserized growth in liberalized agriculture abstract this paper offers a simple model that reconciles rivalrous claims about liberalization s impact on low income agrarian economies growth can accompany smallholder welfare reduction the model developed here reverses the causality of bhagwati s immiserizing growth model price shocks cause welfare effects that drive output response rather than output shocks causing price shocks and then welfare effects as in the trade theoretic original immiserized growth seems a plausible explanation for some important cases e g the malagasay case considered here in which liberalization appears to have engendered both real agricultural growth and heightened food security stress among smallholder food producers

the effect of the sloping land conversion programme on farm household productivity in rural china abstractthe objective of this paper is to examine the treatment effect on farm household productivity induced by the sloping land conversion program using large balanced household level data from five provinces during 1996 2010 this study shows that the slcp significantly improved the productivity of participants during the first round of funding of the programme until 2008 while the effects decreased gradually in the second round with most years not showing significant differences moreover it is found that there are heterogeneous effects on farm household productivity between the south and north as well as between poor and rich regions

quantifying the uncertainty about the half life of deviations from ppp we propose a bayesian framework in which the uncertainty about the half life of deviations from purchasing power parity can be quantified based on the responses to a survey study we propose a prior probability distribution for the half life under the recent float intended to capture widely held views among economists we derive the posterior probability distribution of the half life under this consensus prior and confirm the presence of substantial uncertainty about the half life we provide for the first time a comprehensive formal evaluation of several nonnested hypotheses of economic interest including rogoff s 1996 claim that the half life is contained in the range of 3 to 5 years we find that no hypothesis receives strong support from the data copyright 2002 john wiley sons ltd

getting agriculture moving do markets provide the right signals abstract political discrimination has often pushed the domestic value of agriculture in developing countries below its value in markets at the border this paper seeks to explain the reasons why border prices themselves undervalue the linkages that agriculture has to economic growth in the early stages of development if agriculture is critically important to stimulating and sustaining rapid economic growth those countries that fail to correct this discrimination exact a heavy toll in economic performance furthermore the poorest countries will suffer the most agricultural development and development of the non agricultural economy are closely linked the traditional market mediated linkages form the core of economic analysis of the role of agriculture in economic development providing labour for an industrial work force food for an expanding population with higher incomes savings for industrial investments markets for industrial output export earnings to pay for imported capital goods and raw materials for agro processing industries a second category of linkages is not well mediated by market forces even when markets are working well the impact of agricultural growth on the rest of the economy through non market linkages can be traced using a simple growth accounting framework that examines contributions to the labour force capital investment and the productivity with which these two physical factors are utilised several linkages stand out as likely to be important and potentially measurable because they draw on the efficiency of decision making in rural households the low opportunity cost of their labour resources the opportunity for farm investment without financial intermediaries the potential to earn high rates of return on public investments that correct for urban bias the contribution of food price stability to increased efficiency in investment decisions and the impact of growth in food production on widespread improvement in nutrient intake and labour productivity each of these factors alone as public investment and favourable policy stimulate growth in the agricultural sector should cause an increase in the efficiency of resource allocation and thus higher total factor productivity several of these mechanisms will also serve to speed factor accumulation by increasing the savings rate or improving factor mobility

rural infrastructure transactions costs and market participation in kenya abstract we develop a conceptual framework for quantifying fixed transactions costs facing semisubsistence households using household survey data from a sample of 324 kenyan maize farmers we jointly estimate household supply and demand schedules and transactions costs econometric results indicate that on average the ad valorem tax equivalent of fixed transactions costs for households in our sample is 15 additional analysis indicates that economic isolation is positively associated with the size of transactions costs to the best of our knowledge ours are the first empirical estimates of the magnitude of fixed transactions costs for agricultural households in developing countries

links between the local trade in natural products livelihoods and poverty alleviation in a semi arid region of south africa can the local commercialization of natural products contribute to reduced poverty and vulnerability commentary on this issue is mixed with some observers being quite optimistic while others hold a counterview this paper explores the poverty alleviation potential of four products traded in bushbuckridge south africa traditional brooms reed mats woodcraft and marula beer while key in enhancing the livelihood security of the poorest households these products were unlikely to provide a route out of poverty for most although there were exceptions incomes often surpassed local wage rates and some producers obtained returns equivalent to the minimum wage non financial benefits such as the opportunity to work from home were highly rated and the trade was found to represent a range of livelihood strategies both within and across products

agroclimatic shock income inequality and poverty evidence from burkina faso abstract this paper examines the impacts of agroclimatic shock on income inequality and poverty using household farm data from three agroecological zones of burkina faso together with income source decompositions of the gini coefficient and the foster greer thorbecke poverty index before and after a severe drought our findings reveal that because the poor lack acces to off farm income off farm income increases inequality and fails to shield poor households against agroclimatic risks the direction of the empirical relationship between changes in inequality and poverty after the drought depends critically on environmental variables and on apparent constraints on income diversification at different points in the income distribution

food security strategies under extremely adverse conditions the determinants of household income and consumption in rural mozambique abstract this paper uses household survey data from war torn northern mozambique to examine the factors associated with higher incomes and improved rural household food security incomes and calorie consumption were found to be low and variable in each district and both are highly correlated with land holdings the central role of land holdings is largely a result of serious market failure food market participation rates and the proportion of net buyers are lower than in other sub saharan africa ssa research purchased food as a percentage of total caloric intake and off farm income as a percentage of total income are both very low by ssa standards in short surveyed smallholders have adopted a strategy of marked reliance on farm based own production to ensure their survival it is suggested that land holdings will continue to be key determinants of household income and consumption for the foreseeable future broad based rural development efforts possibly organized around existing cotton growing enterprises may offer one way out of the poverty trap for smallholders

using evidence of household income diversification to inform study of the rural nonfarm labor market in africa abstract the labor market literature in developing countries has seldom drawn on the studies of rural household income diversification this paper draws on such studies to inform future study of the rural nonfarm labor market in africa the review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor as compared to self employment of nonfarm sector earnings as compared to farm sector wage earnings and of local nonfarm earnings as compared to migration earnings the most worrying finding was the poor distribution of nonfarm earnings in rural areas despite the importance of these earnings to food security and farm investments this poor distribution implies significant entry barriers and market segmentation it is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural africa

estimation of linear rational expectations models in the presence of deterministic terms abstract hansen and sargent 1981b discussed instrumental variables procedures for estimating linear rational expectations models under the assumption that all variables have zero unconditional means this note points out two implications if variables instead have nonzero unconditional means first there are additional restrictions beyond those noted by hansen and sargent 1981b and second imposing these restrictions results in more efficient estimates of the parameters that are the focus of hansen and sargent 1981b explicit formulas are given for the restrictions generated by some commonly assumed deterministic terms

transition in sub saharan africa agriculture urbanization and income growth abstract econometric analysis of some 40 years of data has provided mixed results because of the defects of the data and because there are some relatively sudden structural economic shifts an important shift is when agricultural labor ceases to grow now happening in sub saharan africa ssa a model of the interrelationship over time of the rural mainly agricultural sector and the urban mainly manufacturing and service sector is proposed each provides a market to the other growth in both requires investment but of distinctly different types their interaction results in an s shaped curve many ssa countries are in the acceleration phase and its agriculture particularly in semi arid areas is increasingly oriented to the growing home market case studies show farmers have invested and adopted new technologies but the transition to an urbanized economy has been hindered by poor policies the current need is for appropriate investments and policies to develop the productivity of the urban sectors so that they can continue to stimulate agriculture and provide jobs for those who are leaving farming

convergence rates to purchasing power parity for traded and nontraded goods this article estimates the speed of the adjustment coefficient in structural error correction models we use a system method for real exchange rates of traded and nontraded goods by combining a single equation method with hansen and sargent s instrumental variables methods for linear rational expectations models we apply these methods to a modified version of mussa s model our results show that the half lives of purchasing power parity deviations for the rates of traded goods are less than 1 year and are shorter than those for general price and for nontraded goods in most cases implying a faster adjustment speed to parity

rural nonfarm income and its impact on agriculture evidence from albania using data from the 2005 albania living standards measurement study alsms05 survey this article analyzes the overall impact of household nonfarm income generating activities riga on agricultural expenditures as well as technical efficiency of rural farm households we also differentiate the impact for subsistence and commercial farmers who are in the top 25 of the distribution of value of annual agricultural sales our results show that on the whole albanian rural households utilize their nonfarm earnings not to invest in time saving efficiency increasing technologies but to move out of crop production we derive similar findings when we try to estimate the same relation separately for commercial and subsistence farmers however for commercial farmers we find a positive impact of household nonfarm earnings on livestock expenditures

the social dynamics of labor shortage in south african small scale agriculture this article examines the relationship between unemployment family structure and labor allocation in rural south africa chronic joblessness has meant that many young unemployed adults remain in the parental home however their productive labor is often not utilized in family farming using detailed ethnographic data on intra household social relations i argue that the prohibitive cost of marriage and its consequent decline has led to the erosion of obligations formerly implied by the conjugal contract young unmarried adults often have limited responsibilities to provide labor or income to the parental home diminishing the overall viability of small scale farming

the scramble in africa reorienting rural livelihoods abstract structural adjustment and market liberalization policies of the past 15 years have accelerated deagrarianization in sub saharan africa peasant producers have veered away from production of traditional export crops and commercial staple foods in rural areas remote from roads and urban markets nonagricultural income diversification has been substituted in the search for much needed cash earnings citing recent village survey evidence this paper argues that the economic restructuring of african smallholders work lives has been accompanied by deep rooted social change divisions of labor and decision making power within peasant households have altered and wealth differentiation between households has deepened depeasantization of the countryside is currently taking place as rural household members of both genders scramble for viable livelihoods

institutional change climate risk and rural vulnerability cases from central mexico summary a multiscalar multistressor assessment of rural vulnerability is presented illustrating how globalization market liberalization and climatic risk simultaneously structure the livelihood strategies of mexican smallholders ethnographic data collected in three communities are used to argue that farmers capacities to manage climatic risk are circumscribed by the ways in which they are able to negotiate changes in agricultural policy four livelihood strategies are explored in detail to show that market integration does not necessarily improve risk management capacity and that subsistence maize production while highly sensitive to hazards may actually serve to enhance livelihood stability the dominance of economic uncertainty over environmental risk in households decision making implies a continued role for government intervention to help households adapt to climatic stress

effects of household size and composition on consumption in rural households in matabeleland south zimbabwe abstract this study using a survey of rural households in zimbabwe in 1990 91 focuses on the effects of changing household composition on patterns of expenditures and provides estimates of the cost of a child as well as of family members in other age groups in addition to age differences in the size and direction of responses to changing family composition the paper highlights significant differences across product groups these effects are more muted in larger households

the purchasing power parity persistence paradigm abstract rogoff journal of economic literature 1996 34 647 668 describes the remarkable consensus of 3 5 year half lives of purchasing power parity deviations among studies using long horizon data these studies however focus on rejections of unit roots in real exchange rates and do not use appropriate techniques to measure persistence our half life estimates explicitly account for serial correlation sampling uncertainty and most importantly small sample bias calculating confidence intervals as well as point estimates for long horizon and post 1973 data we find that even though most of the point estimates lie within the 3 5 year range univariate methods provide virtually no information regarding the size of the half lives

a virtuous circle model of rural urban development evidence from a kenyan small town and its hinterland using data from kenya this article explores several propositions of a virtuous circle model of rural urban development to determine when the model might operate within a local economy it is shown that the cycle of reinforcing linkages hinges on a vigorous export base external demand is only effective when farmers are connected to markets small towns help raise agricultural productivity by allowing farmers to spread risk by diversifying incomes vibrant agriculture spurs the proliferation of local non farm activities which in turn create demand for farm produce though not necessarily from the same area and finally the virtuous circle model can be undermined by inappropriate macroeconomic policies

rural nonfarm employment and incomes in the himalayas abstract nonfarm activities generate on average about 60 of rural households incomes in the himalayas this article analyzes the determinants of participation in nonfarm activities and of nonfarm incomes across rural households a unique data set collected in the himalayan region of india allows us to deal with the heterogeneity of rural nonfarm activities by using aggregations into categories that are useful both analytically and for policy purposes we conduct an empirical inquiry that reveals that education plays a major role in accessing more remunerative nonfarm employment other household assets and characteristics such as land social status and geographical location also play a role

weather shocks and agricultural commercialization in colonial tropical africa did cash crops alleviate social distress a rapidly growing body of research examines the ways in which climatic variability influences economic and societal outcomes this study investigates how weather shocks triggered social distress in british colonial africa further it intervenes in a long standing and unsettled debate concerning the effects of agricultural commercialization on the abilities of rural communities to cope with exogenous shocks we collect qualitative evidence from annual administrative records to explore the mechanisms linking weather extremes to harvest failures and social distress we also conduct econometric testing on a novel panel dataset of 143 administrative districts across west south central and east africa in the interwar era 1920 39 our findings are twofold first we find robust evidence that rainfall anomalies both drought and excessive precipitation are associated with spikes in imprisonment our proxy for social distress we argue that the key causal pathway is the loss of agricultural income which results in higher imprisonment for theft unrest debt and tax default second we find that the impact of weather shocks on distress is partially mitigated by the cultivation of export crops our findings suggest that even in the british colonial context smallholder export crop cultivation led to higher private incomes as well as greater public investment our findings speak to a topic of considerable urgency today as the process of global climate change accelerates generating more severe and unpredictable climatic extremes an increased understanding and identification of adaptive and mitigating factors would assist in targeting policy interventions and designing adaptive institutions to support vulnerable rural societies

rural livelihood diversification in sub saharan africa a literature review abstractthis article provides a comprehensive review of the literature on the nature and evolution of rural livelihood diversification in sub saharan africa and the situation regarding smallholders it reveals mixed findings about the causes and consequences of livelihood diversification on rural smallholders adopting this strategy a lot of evidence from the literature suggests that it is relatively better off smallholders with sufficient assets who achieve successful livelihood diversification mainly by exploiting opportunities and synergies between farm and nonfarm activities because of asset constraints increase in incomes and wealth based on livelihood diversification has not yet benefitted the large majority of smallholders

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

the importance of household asset diversity for livelihood diversity and welfare among small farm colonists in the amazon taking a small farm colony on the amazon frontier as a case study this article examines the relationships among household assets livelihood diversity and welfare the findings show that 1 few

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

resilient labour workplace regimes globalisation and enclave development in swaziland abstractare new forms of foreign investment in africa having a major impact on local workers are they significantly altering labour practices and conditions i explore these questions with reference to swaziland and the ethnography of labour relations in a christian company town a comparative perspective looking at the south african regional economy shows that the legacy of apartheid enclave development casts a shadow over workers futures economic dualism characterised by cheap labour drawn from an ever expanding informal sector and reinforced by social political and institutional factors tends to neutralise the possibility of inclusive economic growth driven by foreign capital

prevention and treatment in environmental policy design abstract in many environmental contexts the damages that result from some externality generating activity can be reduced either through prevention prior to the occurrence of the event or treatment after that occurrence the existing literature has focused on the use of prevention only polinsky and shavell 11 consider explicitly the use of mitigation but their analysis is limited to the case of pareto efficiency in reality policymakers often pursue other objectives such as minimizing damages subject to a budget constraint or minimizing the cost of maintaining a certain safety level this paper provides an analytical framework for examining the choice of prevention vs treatment in the context of these alternative behavioral assumptions it considers first the case where the effectiveness of treatment is known at the time that the allocation decision must be made we then extend the analysis to the case where the effectiveness of treatment is uncertain and develop a framework for addressing the tradeoff between prevention and treatment under a safety rule in both cases we examine the factors that influence the allocation of resources between prevention and treatment and show that these factors can affect the second best allocations of resources in ways that are contrary to the effect under the pareto efficient allocation

non farm income and inequality in rural pakistan a decomposition analysis this article uses three year panel data to analyse the impact of non farm income on income inequality in rural pakistan after pinpointing the importance of rural non farm income for the poor the article decomposes total rural income among five sources non farm agricultural livestock rental and transfer this decomposition shows that non farm income represents an inequality decreasing source of income the study then decomposes the sources of non farm income this analysis reveals that while non farm unskilled labour income has an equalising effect on income distribution non farm government income has a disequalising effect

agriculture and economic growth in ethiopia growth multipliers from a four sector simulation model abstract agriculture accounts for over half of ethiopian gdp yet the case for agriculture as a focus of economic growth strategies must rely on identifying a set of intersectoral linkages through which agricultural growth contributes to the growth of non agriculture in the ethiopian economy this article develops a four sector numerical simulation model of economic growth in ethiopia which permits the calculation of macroeconomic growth multipliers resulting from income shocks to agriculture services modern industry and traditional industry the resulting growth multipliers are 1 54 for agriculture 1 80 for services 1 34 for modern industry and 1 22 for traditional industry these results depict an economy in which intersectoral linkages operate on a highly uneven basis these limits are reflected in the wide disparity between sectoral growth multipliers and by substantial differences in the patterns of their decomposition the policy relevance of these findings relate in part to the distributional implications of growth in particular sectors poverty in ethiopia is disproportionately rural an income shock to agriculture is clearly the most progressive choice indicating the need to highlight agricultural development in growth strategies for ethiopia yet the simulation results further indicate that doing so imposes relatively little trade off against total benefit while a 1 service sector income shock generates 0 80 in indirect benefits a 1 agricultural income shock still generates 0 54 in indirect gains a somewhat smaller benefit but one likely to make the greatest possible impact on poverty reduction

linkages between the farm and nonfarm sectors at the household level in rural ghana a consistent stochastic distance function approach this article explores the effects within households of an expanding rural nonfarm rnf sector in ghana we ask whether the growing rnf sector allows for economies of diversification within farms how it affects household input demands and whether it has measurable effects in overall household production efficiency we explore the intrahousehold linkages between agricultural and rnf activities first assuming perfectly competitive input and output markets and then with market failures in particular missing labor and credit markets we then measure these linkages using a household level input distance function finding high levels of inefficiency in ghanaian farms also there are cost complementarities between the rnf sector and the agricultural sector particularly with food crops in which the poorest tend to specialize the expansion of the rnf sector increases demand for most inputs including agricultural land finally we show that smaller farms tend to be more efficient and that rnf output is helping the farm household to become more efficient but the latter result is not robust

structural error correction models a system method for linear rational expectations models and an application to an exchange rate model this paper develops a system instrumental variable method to estimate the speed of adjustment coefficient in the long run equilibrium of structural error correction models for a class of linear rational expectations models this method is applied to an exchange rate model with sticky prices in which the speed of adjustment coefficient governs the half life of the real exchange rate compared to single equation methods the system method gives smaller half life estimates with sharper standard errors

wealthier is healthier we estimate the effect of income on health using cross country timeseries data on health infant and child mortality and life expectancy and income per capita we use instrumental variables estimates using exogenous determinants of income growth to identify the pure income effect on health isolated from reverse causation or incidental association the long run income elasticity of infant and child mortality in developing countries lies between 0 2 and 0 4 using these estimates we calculate that over a half a million child deaths in the developing world in 1990 alone can be attributed to the poor economic performance in the 1980s

political feasibility of structural adjustment in africa an application of sam mixed multipliers abstract the implementation of structural adjustment programs saps has often been undermined by opposition from politically powerful groups who are favored by existing policies to assess the political sustainability of saps this paper uses social accounting matrices for three african countries to model the income effects of stylized saps on different socioeconomic groups the analysis reveals wide variation in the likelihood for typical saps to be acceptable to political elites while generating growth in the rest of the economy the presence of a rural elite or strong farm nonfarm linkages can enhance the political sustainability of saps

determinants and effects of income diversification amongst farm households in burkina faso using four years of household data from three agroecological zones in burkina faso sahelian sudanian and guinean the article examines the determinants and effects of household income diversification harvest shortfalls and terms of trade are found to drive diversification but land constraints do not income diversification is associated with higher incomes and food consumption and more stable income and consumption over years

district level economic linkages in kenya evidence based on a small regional social accounting matrix abstract this paper explores the nature and extent of the economic linkages in a small regional economy defined by a market center and its hinterland in kenya the analysis is based on a set of income and employment multipliers derived from a social accounting matrix estimated for the region issues considered include the impact of production activities on regional value added and employment the influence of sectoral production on the level of household income and the impact of household expenditure on regional value added and the relative significance of production and consumption linkages in terms of stimulating aggregate income the above questions are examined under the assumption of complete excess capacity in regional production and under the assumption of supply constraints in agriculture the usefulness of the analysis for district level economic planning is demonstrated

the multi market analysis of a housing price transmission model in this article we examine dynamic relationships among housing prices from four firsttier cities in china from december 2000 to may 2010 and present an equilibrium model of housing price in multi markets by explicitly incorporating and modelling endogenous price series in competing housing markets our empirical model is able to capture the existence of long run equilibrium relationships and important short run dynamics and price structures such as price leadership price transmission lag and asymmetric price responses such multi market analysis has generalized implications and can easily be applied to analyse the pricing dynamics among other real estate markets in the world our major contribution lies in two aspects first we employ an error correction model ecm with directed acyclic graphs dag to study the price dynamics in the four largest and key housing markets in china second we uncover a price transmission among these housing markets in china and provide an insightful understanding of price adjustment across markets the revealed effective price transmission and high correlation among these different markets actually is not a good thing for a stable financial system and for the defence against price bubbles in the housing market

principal challenges confronting smallholder agriculture in sub saharan africa summary this paper uses small scale farm survey data from five countries of eastern and southern africa to highlight four under appreciated issues i how land distribution patterns constrain the potential of crop technology and input intensification to enable many small farms to escape from poverty ii why most smallholders are unable to produce more than a marginal surplus or participate meaningfully in commodity markets iii why most farmers are directly hurt by higher grain prices and iv why the marketed agricultural surplus is exceedingly concentrated among a small group of relatively large smallholders policy and public investment options are reviewed in the light of these findings there is no one future for small farms in africa much depends on government policy and investment decisions

understanding the role of rural non farm enterprises in africa s economic transformation evidence from tanzania tanzania s recent growth boom has been accompanied by a threefold increase in the share of the rural labour force working in nonfarm employment although households with nonfarm enterprises are les

the rural non farm sector issues and evidence from developing countries abstract the rural non farm sector has traditionally been viewed as a low productivity sector which produces low quality goods it is often expected to wither away as a country develops recent years have seen a shift away from this position towards recognition that the rural non farm sector can and often does contribute to economic growth rural employment poverty reduction and a more spatially balanced population distribution this paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective focussing on the experience in developing countries the paper documents the size and heterogeneity of the sector pointing to evidence that in many countries the sector is expanding rather than declining the issues associated with measuring the sector s economic contribution are discussed followed by empirical assessments for several countries and regions the distributional impact of non farm earnings is examined and it is found that a pro poor impact while by no means inevitable can be considerable the sector s trajectory over time in different settings is reviewed and the scope for and experience of various policy interventions is discussed

agricultural tradables and economic recovery in uganda the limitations of structural adjustment in practice abstract uganda s economic reform program has been widely regarded as a success story for structural adjustment nevertheless a large trade deficit persists shored up by inflows of aid and private remittances the poor performance of the agricultural tradables sector is presented as the key explanation for this trade imbalance two main reasons for this poor performance are found to be the failure to liberalize producer prices quickly and the failure to overcome early institutional resistance to reforms of marketing arrangements uganda s recovery is therefore much less impressive than it appears and the sustainability of the now heavily aid dependent economy must remain in serious doubt

from tragedy to renaissance improving agricultural data for better policies abstractagricultural development is an essential engine of growth and poverty reduction yet agricultural data suffer from poor quality and narrow sectoral focus there are several reasons for this 1 difficult to measure smallholder agriculture is prevalent in poor countries 2 agricultural data are collected with little coordination across sectors and 3 poor analysis undermines the demand for high quality data this article argues that initiatives like the global strategy to improve agricultural and rural statistics bode well for the future moving from devarajan s statistical tragedy to kiregyera s statistical renaissance will take a continued long term effort by individual countries and development partners

women and structural transformation development is at a relatively early stage 2 analysis of women s role as economic actors as distinct from being part of the labor force in general is still rudimentary 3 the extent to which and the conditions under which gender may influence a variety of economic outcomes are not well researched the nature and the extent of segmentation of economic activity between males and females and their changing roles in different socioeconomic settings and during the course of economic development are inadequately investigated in economic literature 4 consequently whether the efficiency and welfare losses from women s low participation in economic activity are significant in static and dynamic contexts is inadequately articulated much of the research on women in developed countries has been in a comparative static context 5 the changes in incomes technology demography and tastes with regard to women s roles however are not only much more rapid but also simultaneous in developing countries making research in a comparative static context of relatively little value the implications of the dynamic factors are analytically complex to handle but are critical for public policy even where policy implications are obvious from the existing limited research however these have not always been effectively incorporated by governments in their actions this article first summarizes the major themes of the various types

wildlife conservation in zambia impacts on rural household welfare summary we investigate the impact of wildlife conservation policies in zambia on household welfare in game management areas gmas which are buffer zones around national parks analysis of data from a nationwide survey of rural households shows that gmas are positively associated with household income and crop damage from wildlife conflicts gains and damages were greatest among households in gmas with greater wildlife diversity with net gains relatively greater for wealthier households households in prime well stocked gmas were more likely to participate in off farm wage and self employment compared to other rural households but they were also more likely to suffer crop losses related to wildlife conflicts the findings suggest that wildlife conservation and tourism development can contribute to pro poor development but may be sustainable only if human wildlife conflicts are minimized or compensated

adaptation to land constraints is africa different since the seminal works of malthus and boserup scientists have long debated the impact of population growth and land constraints on the wellbeing of rural people today these concerns are particularly relevant to africa with its rapid population growth very small farms and chronic food insecurity in this paper we examine adaptation to falling land labor ratios using a comprehensive theoretical framework in which households faced with binding land constraints can respond in three ways intensifying agricultural production diversifying out of agriculture and reducing fertility rates using cross country data and drawing upon the existing literature we reach three conclusions first population density is associated with reduced fallows and more intensive use of land but not fertilizer use or irrigation indicating major challenges in achieving sustainable intensification or agricultural productivity growth second there is little evidence of successful non farm diversification in response to land pressures in africa from domestic or international income sources third rural africans in land constrained countries desire smaller families but have thus far benefited little from family planning policies these findings underscore the need for a coordinated multi sectoral approach to sustainably reduce poverty in the region

creating an enabling environment policy conditions for less favored areas abstract within the rural areas those with a low productive potential usually home to poor agricultural households with limited access to assets are often the core of rural poverty and under constant threat of resource degradation there is ample evidence that neither trickle down effects in high potential areas nor structural adjustment measures have generated much poverty reduction in these less favored areas lfas often due a lack of attention to the development of factor and commodity markets sustainable and pro poor development of lfas therefore poses formidable challenges and requires special measures to achieve an enabling institutional and policy environment it needs to be based on viable sources of growth that imply considerable investments in physical and human capital and appropriate technology recognize positive externalities and add equity and natural resource management concerns in a context of heterogeneity to establish policy conditions that favor such development the role of and experience with major policy interventions incentives and institutions relevant to lfas is reviewed and an attempt is made to generalize these findings to this effect the different interventions are grouped into three broad categories viz price and market policies public services and investment and institutions and governance while countries should adopt the relevant market and trade policies the case is made for greater awareness of the adverse impact these policies can have in lfas and on their poor and complementary policies and investments need to be put in place to buffer or offset adverse outcomes key complementary interventions include public investments in infrastructure human capital and technology to enhance the competitiveness of lfas and policies to improve their market access there is also need for appropriate phasing of policy and market reforms to give people time to adjust and effective safety nets to cushion loss of livelihood options

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

gender and rural livelihoods in kenya this article considers the implications for gender relations of different rural livelihoods while many rural areas in kenya have been drawn into intensive commercial production others formerly dependent on remittances from migrant labour have seen these diminish recent empirical studies of gender and livelihoods in kenya are compared commercial production and the drying up of remittances set up quite different processes in rural households these may lead to greater corporateness to conflict or even to fragmentation the outcome depends on the potential rewards of co operation but also on domestic authority relations and on ideologies of common or divided interest

do panels help solve the purchasing power parity puzzle although rogoff described the remarkable consensus of 3 to 5 year half lives of purchasing power parity ppp deviations among studies using long horizon data recent works using panel methods with post 1973 data report shorter half lives of 2 to 2 5 years but these studies do not use appropriate techniques to measure persistence we extend median unbiased estimation methods to the panel context calculate both point estimates and confidence intervals and provide strong evidence confirming rogoff s original claim although panel regressions provide more information on the persistence of real exchange rate shocks than univariate regressions they do not help solve the ppp puzzle

determinants of nonfarm earnings of farm based husbands and wives in northern ghana the nonfarm work participation decisions of married men and women in rural northern ghana were jointly and separately estimated for married couples through a bivariate probit using recent survey data selectivity bias was corrected for in estimating wage offer and labor supply equations using heckman s procedure education experience infrastructure distance to the capital and population density as well as interactions between education and infrastructure and between education and distance to the city were found to be significantly related to the probability of nonfarm labor market participation wages and the amount of nonfarm labor performed with significant differences by gender

pests and pesticides risk and risk aversion abstract theoretical and applied literature on risk in decision making for agricultural pest control is reviewed risk can affect pesticide decision making either because of risk aversion or because of its influence on expected profit it is concluded that risk does not necessarily lead to increased pesticide use by individual farmers uncertainty about some variables such as pest density and pest mortality does lead to higher optimal pesticide use under risk aversion however uncertainty about other important variables such as output price and yield leads to lower optimal levels of pesticide use neglect of these variables in most studies has led to the false assumption that pesticides are always risk reducing inputs furthermore there is evidence that in general the pesticide dosage which maximises expected profit is lower under risk than under certainty depending on the balance of forces to increase and decrease pesticide use under risk in many circumstances the net effect of risk on optimal decision making for pest control may be minimal the effect on risk of information about pest density and other variables as in integrated pest management programmes is discussed evidence on this issue is mixed a range of analytical techniques for analysing risk in pest control is reviewed throughout the paper gaps in the existing literature are identified

coexistence of gm and non gm crops with endogenously determined separation the possibility that genetically modified gm crops may contaminate non gm crops through pollen mediated gene flow presents a challenge to coexistence of gm agriculture with conventional and organic farming systems in this paper an analytical model of coexistence is developed that allows for endogenous derivation of efficient widths and allocation of pollen barriers to limit contamination of non gm crops to reflect the uncertainty that surrounds pollen dispersal mechanisms the model contains a stochastic contamination function and safety rule decision mechanism constraining the level of contamination to remain below a tolerated adventitious presence with a given probability two policies are considered and their performance is tested the tolerance level of adventitious presence and the allocation of responsibility for implementing coexistence measures to either gm or non gm farmers the relative size of gm rents the value of productivity gains and the non pecuniary benefits from gm crops rents for identity preserved non gm crops price premiums realised over the gm crop price characteristics of farms and possible variation in agricultural landscapes are also taken into account the findings indicate that conventional adventitious presence tolerances can be met without ex ante mandating large widths of pollen barriers at the policy level the findings of this paper are relevant for setting region specific pollen barriers widths and or for establishing institutions that facilitate cooperative coexistence

beyond export led growth abstract in light of the adverse conditions in the current international economic environment this paper reassesses the feasibility of continuing to rely on manufacturing export led growth as the major development dynamic for most ldcs during the next decade this paper argues that after the initial stages of industrial development the emphasis in policy toward agriculture should shift from surplus extraction to surplus creation and to the generation of demand linkages with the rest of the economy the author compares the relative merits of two alternative open development strategies export led industrialization and agricultural demand led industrialization adli by means of several simulation experiments the experiments are performed with a computable general equilibrium model of a small low income semi industrial open economy which is a stylization of south korea of 1963 they are carried out in an international environment assumed to represent the next decade based on a rate of growth of international demand for imports of about half the 1960 1973 rate the results support the adli approach on all counts

impact of global cotton markets on rural poverty in benin world cotton prices fell by about 40 over 2001 2002 focusing attention on the effect of subsidies for cotton growers in depressing world prices this paper combines farm survey data from benin with assumptions about the decline in farm level prices to estimate the direct and indirect effects of cotton price reductions on rural income and poverty in benin the results indicate that there is a strong link between cotton prices and rural welfare in benin a 40 reduction in farm level prices of cotton results in an increase in rural poverty of 8 points in the short run and 6 7 points in the long run under the assumptions of the partial input output model we estimate the multiplier to be in the range of 2 96 meaning that 1 us of reduced income by cotton growers results in a contraction of 2 96 us in overall income finally econometric analysis of the determinants of the demand for hired agricultural labor suggests that falling cotton prices will not greatly reduce labor demand since the labor intensity of cotton is similar to that of competing crops in benin overall the study demonstrates the impact of changes in world cotton prices on rural poverty in benin thus highlighting the likely negative effects of cotton subsidies in the united states and elsewhere on benin farmers

promoting intersectoral growth linkages in rural africa through agricultural technology and policy reform this paper addresses how increased rural incomes in select african cases are spent on consumption items the implications of these patterns for stimulating rural growth and areas of intervention necessary to sustain demand led growth from improved agricultural technology and economic reforms the country studies utilize panel data collected by the international food policy research institute ifpri in collaboration with african institutions and re

instrumental variables procedures for estimating linear rational expectations models abstract this paper illustrates how to use instrumental variables procedures to estimate the parameters of a linear rational expectations model these procedures are appropriate when disturbances are serially correlated and the instrumental variables are not exogenous we compare our procedures to some alternative estimators that estimate free parameters from restrictions implied by the euler equations the procedures are applicable to a variety of linear rational expectations models several examples of which we cite

long run purchasing power parity during the recent float abstract this paper examines the relevance of long run purchasing power parity ppp which allows for measurement errors during the recent floating exchange rate period previous empirical studies generally fail to find support for long run ppp over this period in this paper in this paper the cointegration property of exchange rates and prices is examined using maximum likelihood procedure and we find significant evidence favorable to long run ppp further tests for symmetry and proportionality indicate that these two conditions are not generally with the data the results support the hypothesis of long run ppp with measurement errors in prices

income portfolios in rural ethiopia and tanzania choices and constraints the article analyses the different income portfolios of households using survey data from rural ethiopia and rural tanzania it suggests that the different portfolios held by households cannot be e

deagrarianization and rural employment in sub saharan africa a sectoral perspective abstract sub saharan africa is steadily becoming less rural in character for decades development thinking has prescribed industrialization as the virtuous path leading away from economic dependence on agriculture but africa s industrial record has been plagued with underperformance an alternative perspective centered on the process of deagrarianization and attendant rural employment generation may offer more explanatory power and policy direction this paper outlines key theoretical components and practical concerns of a deagrarianization approach the nature and incidence of deagrarianization in sub saharan africa is contrasted with that experienced in developed industrial countries conceptual approaches dealing with rural non agricultural employment are identified within different social science disciplines through a thematic review of the literature the conclusion highlights the need for more focused study of the deagrarianization process and rural service sector development

small enterprise employment growth in rural africa become increasingly recognized earlier empirical studies have indicated that they provide 20 to 45 of full time employment and 30 to 50 of rural household income chuta and liedholm haggblade hazell and brown this is also reflected in the agricultural growth linkage literature e g haggblade and hazell where rural enterprise growth is typically a demand driven spinoff of agricultural growth as well as in the rural household studies that have

african re agrarianization accumulation or pro poor agricultural growth recent signs of increasing agricultural production in a number of countries in sub saharan africa are by some commentators connected to local level differentiation this paper discusses such interpretations using household level longitudinal data from smallholder households in eight african countries for the period between 2002 and 2008 the use of a mixed methods social science approach complements traditional economic approaches through adding a spatial perspective pro poor agricultural growth so far is concentrated to particular villages where it is highly inclusive the policy challenge remains to devise strategies that can enhance growth also in marginal areas

right target wrong mechanism agricultural modernization and poverty reduction in uganda summary household consumption surveys suggest that the downward trend in rural poverty indicators recorded in uganda during the 1990s has been reversed since 2000 this paper examines the ugandan government s strategy to reduce rural poverty the plan for modernization of agriculture pma it argues that while there appear few better choices of target for the pma than to improve incomes of the rural poor through increased agricultural productivity emphasis on decentralization as a mechanism for poverty reduction is misplaced in the current political context of uganda the paper considers what alternative mechanisms might better deliver reductions in rural poverty

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

regulating environmental health risks under uncertainty groundwater contamination in california abstract our method for incorporating uncertainty into environmental health risk policy determination corresponds closely to the legal and political strictures governing these policies an application to a case of grounwater contamination demonstrates that 1 the desirability of developing new water supplies versus cleaning up existing ones varies across locations 2 the stringency of any given policy varies inversely with the margin of sagety required 3 the cost premiums imposed by greater aversion to uncertainty may be quite large and 4 the marginal cost of risk reduction decreases significantly as aversion to uncertainty grows implying that assessments of policies based on average risk will tend to overestimate allowable risk comparing an efficient program to the current inefficient approach to risk management indicates that the cost of inefficiency is not great

cointegration and exchange rate dynamics abstract we utilize systems methods of estimation which impose the unit root structure to estimate both the long run equilibrium relationship the cointegrating vector and the short run dynamics of an open economy macroeconomic model in which the exchange rate and the domestic price level are endogenously determined for the united states the model is estimated over the flexible exchange rate period and over two sub periods chosen by structural change tests on the exchange rate both rational and theories consistent expectations are utilized the models with theories consistent expectations outperform those with rational expectations

measuring the marginal cost of nonuniform environmental regulations a method is presented for measuring the marginal welfare cost of environmental regulations affecting agriculture the method incorporates output market effects and recognizes diversity in production conditions among crops regions and seasons an important advantage of the method is that only regional outputs and changes in regional production costs are needed to calculate deadweight loss thus simplifying the measurement of welfare changes this feature of the model is significant since the complexity and substantial data requirements of most existing impact models cause many environmental regulations to be enacted with inadequate analysis of their economic impacts the method also disaggregates welfare impacts by crop place and time thus encouraging the implementation of nonuniform interventions that achieve a given level of environmental quality more efficiently than uniform policies

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

a model of exchange rate dynamics this model treats the exchange rate as an asset price that depends on expectations concerning exogenous real and monetary factors that will affect relative prices and absolute price levels in future periods changes in exchange rates reflect both expected changes in these exogenous factors and changes in expectations occasioned by new information the model explains the random component in exchange rate behavior the source of divergences from purchasing power parity the anticipatory response of exchange rates to future expected disturbances and the causes of exchange rate overshooting

testing purchasing power parity under the null hypothesis of co integration this paper analyzes monthly data on the exchange rates and price indices of the eleven major industrial countries over the modern period of floating exchange rates it presents tests that are based upon the null hypothesis of cointegration the paper finds evidence that most country pairs not involving north american currencies have exchange rates and price indices that are cointegrated it estimates the error correction representation for the series that are cointegrated and it shows that the dynamic adjustment of the relationship between exchange rates and prices is accomplished almost entirely in the market for foreign exchange copyright 1991 by royal economic society

agricultural technology and farm nonfarm growth linkages abstract agricultural growth stimulates rural nonfarm activity by boosting demand for production inputs and consumer goods but different kinds of agricultural technology promote different patterns of nonfarm linkages to explore how key features of agricultural technology affect growth in the rural nonfarm economy this paper reviews an array of cross section and time series evidence bearing on the dynamics of the rural nonfarm economy then using consumption and production parameters associated with different agricultural technologies it introduces a simple model which isolates the effects of different technologies on nonfarm growth linkages

unbiased estimation of the half life to ppp convergence in panel data three potential sources of bias introduce complications for panel data estimation of the half life of purchasing power parity deviations they are bias induced by inappropriate cross sectional aggregation of heterogeneous coefficients small sample estimation bias of dynamic lag coefficients and bias induced by time aggregation of commodity prices all of these biases have been addressed individually in the literature in this paper we address all three biases in arriving at our estimates using an annual panel data set of cpi based real exchange rates for 21 oecd countries from 1973 to 1998 we obtain a point estimate of the unbiased half life of 3 0 years with a 95 confidence interval of 2 3 4 2 years

moving out of poverty in tanzania evidence from kagera abstract this paper uses linked qualitative and quantitative data to explore the growth trajectories of matched households in the kagera region of tanzania finding that agriculture and trade provided the two main routes out of poverty the interplay between initial conditions shocks networks and experiences of life beyond their village determine whether a person moves out of poverty in the following decade

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

gold digging careers in rural east africa small scale miners livelihood choices rural livelihood studies over the past two decades have stressed directional movement away from smallholder agriculture and the diffuse ad hoc uncertain and low earning character of most rural non agricultural income diversification based on a recent survey of small scale mining in tanzania this article documents the higher risks greater potential earnings more elaborate division of labor and career trajectory of miners tracing cohort entry groups indicates that those willing to withstand the hardships of moving from one gold strike to another and time commitment to a career considered dangerous and alienated from agrarian traditions of the tanzanian countryside may be materially rewarded for their efforts

food versus fuel extractive industries insecure land tenure and gaps in world food production summary corporations now go to the ends of the earth to extract natural resources like oil and diamonds from the earth at the same time that farmers investors and development experts try to expand the supply of food sometimes through large land acquisitions in remote regions these two processes of globalization interact in important ways cross national analyses indicate that oil and mineral dependent nations with neo patrimonial elites have lower than expected areas under cultivation and yields from cereal crops booms in extractive sectors and neo patrimonial practices in governance have debilitated agricultural enterprises within nations and conceivably throughout the globe