profits and poverty certification s troubled link for nicaragua s organic and fairtrade coffee producers abstract governments donors and ngos have promoted environmental and social certification schemes for coffee producers as certified market channels are assumed to offer higher prices and better incomes additionally it is presumed that these certifications contribute to poverty reduction of smallholders yet gross margins profits and poverty levels of certified smallholder coffee producers have not yet been quantitatively analyzed applying random sampling techniques our quantitative household survey of 327 randomly selected members of conventional organic and organic fairtrade certified cooperatives in nicaragua is complemented by over a hundred qualitative in depth interviews the results show that although farm gate prices of certified coffees are higher than of conventional coffees the profitability of certified coffee production and its subsequent effect on poverty levels is not clear cut per capita net coffee incomes are insufficient to cover basic needs of all coffee producing households certified producers are more often found below the absolute poverty line than conventional producers over a period of ten years our analysis shows that organic and organic fairtrade farmers have become poorer relative to conventional producers we conclude that coffee yield levels profitability and efficiency need to be increased because prices for certified coffee cannot compensate for low productivity land or labor constraints

ingredients of famine analysis availability and entitlements famines often take place in situations of moderate to good food availability without any significant decline of food supply per head the paper presents an alternative approach to famines which does not concentrate on availability but on people s ability to command food through legal means available in the society including the use of production possibilities trade opportunities entitlements vis a vis the state etc the approach is explained focusing on exchange entitlement mappings fluctuations in which can lead to big shifts in the intergroup distribution of food command the approach is then applied to the bengal famine of 1943 the ethiopian famine in wollo in 1973 and the bangladesh famine in 1974 and some general conclusions are drawn about the nature and classes of famines

from correlates and characteristics to causes thinking about poverty from a chronic poverty perspective summary poverty and poverty reduction are currently the central concerns of development discourse and policy despite recent theoretical advances poverty analysis continues to be dominated by an income consumption conception of poverty we argue for understandings of poverty that go beyond measurement led conceptualizations to more adequately expose the causes of poverty chronic poverty is one such concept its focus on poverty duration and dynamics highlights the forms of social relations that produce poverty and which are often embedded within political institutions and economic structures poverty reduction does not simply require good policy it requires creating the capacity of poorer people to influence and hold accountable those who make policies

green revolution in sub saharan africa implications of imposed innovation for the wellbeing of rural smallholders green revolution policies are again being pursued to drive agricultural growth and reduce poverty in sub saharan africa however conditions have changed since the well documented successes of the 1960s and 1970s benefitted smallholders in southern asia and beyond we argue that under contemporary constraints the mechanisms for achieving improvements in the lives of smallholder farmers through such policies are unclear and that both policy rationale and means of governing agricultural innovation are crucial for pro poor impacts to critically analyze rwanda s green revolution policies and impacts from a local perspective a mixed methods multidimensional wellbeing approach is applied in rural areas in mountainous western rwanda here malthusian policy framing has been used to justify imposed rather than induced innovation the policies involve a substantial transformation for rural farmers from a traditional polyculture system supporting subsistence and local trade to the adoption of modern seed varieties inputs and credit in order to specialize in marketable crops and achieve increased production and income although policies have been deemed successful in raising yields and conventionally measured poverty rates have fallen over the same period such trends were found to be quite incongruous with local experiences disaggregated results reveal that only a relatively wealthy minority were able to adhere to the enforced modernization and policies appear to be exacerbating landlessness and inequality for poorer rural inhabitants negative impacts were evident for the majority of households as subsistence practices were disrupted poverty exacerbated local systems of knowledge trade and labor were impaired and land tenure security and autonomy were curtailed in order to mitigate the effects we recommend that inventive pro poor forms of tenure and cooperation none of which preclude improvements to input availability market linkages and infrastructure may provide positive outcomes for rural people and importantly in rwanda for those who have become landless in recent years we conclude that policies promoting a green revolution in sub saharan africa should not all be considered to be pro poor or even to be of a similar type but rather should be the subject of rigorous impact assessment such assessment should be based not only on consistent objective indicators but pay attention to localized impacts on land tenure agricultural practices and the wellbeing of socially differentiated people

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

deposit insurance reform what are the issues and what needs to be fixed abstract the current problems in the commercial banking industry have led to widespread calls for reform of the deposit insurance contract on the grounds that it promotes moral hazard we review the empirical evidence for the significance of moral hazard as an important cause of the present crisis we then evaluate various reform proposals grouped into two broad classes proposals that seek to impose greater discipline on bank stockholders and proposals to increase the disciplinary role of bank debtholders finally we identify some issues that have received inadequate attention in the literature on bank regulation

counting and multidimensional poverty measurement this paper proposes a new methodology for multidimensional poverty measurement consisting of an identification method k that extends the traditional intersection and union approaches and a class of poverty measures m our identification step employs two forms of cutoff one within each dimension to determine whether a person is deprived in that dimension and a second across dimensions that identifies the poor by counting the dimensions in which a person is deprived the aggregation step employs the fgt measures appropriately adjusted to account for multidimensionality the axioms are presented as joint restrictions on identification and the measures and the methodology satisfies a range of desirable properties including decomposability the identification method is particularly well suited for use with ordinal data as is the first of our measures the adjusted headcount ratio we present some dominance results and an interpretation of the adjusted headcount ratio as a measure of unfreedom examples from the us and indonesia illustrate our methodology

the effect of capital structure on a firm s liquidation decision abstract a firm s liquidation can impose costs on its customers workers and suppliers an agency relationship between these individuals and the firm exists in that the liquidation decision controlled by the firm as the agent affects other individuals the customers workers and suppliers as principals the analysis in this paper suggests that capital structure can control the incentive conflict problem of this relationship by serving as a pre positioning or bonding mechanism appropriate selection of capital structure assures that incentives are aligned so that the firm implements the ex ante value maximizing liquidation policy

rural poverty dynamics in kenya structural declines and stochastic escapes we use panel survey data and household event histories to explore patterns of rural poverty dynamics in kenya over the period 2000 2009 we find substantial mobility across poverty categories using economic transition matrices drawing on asset based approaches we distinguish stochastic from structural poverty transitions few households successfully escaped poverty through asset accumulation up to 35 of the upwardly mobile while a large proportion of households up to 66 declining into poverty experienced structural transitions using household event histories we find significant differences across structural poverty transition classes in livelihood strategies household level shocks and other factors

variable rate deposit insurance a re examination abstract this paper investigates the impact of variable rate deposit insurance on the financial and real sectors of the economy and its role as an absorber of bankruptcy risk within these sectors a variable rate system raises the cost of funds to the real sector and increases probability of bankruptcy of the borrowing firms when such bankruptcies occur society experiences a dead weight loss we argue that appropriate deposit insurance pricing must weigh the social costs connected with both financial firm failure and real sector bankruptcy

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

federal deposit insurance regulatory policy and optimal bank capital this paper seeks to explain the combination of explicit and implicit pricing for deposit insurance employed by the fdic essentially the fdic sells two products insurance and regulation to span the product space it must and does set two prices we argue that the need to establish regulatory disincentives to bank risk taking is the heart of the controversy over the adequacy of bank capital and that the ability to close risky banks before exhausting their charter value i e the value of their right to continue in business stands at the center of these disincentives and in front of the fdic s insurance reserves just as a book shouldn t be judged by its cover a government agency shouldn t be judged by the words behind its initials with the fdic federal deposit insurance corporation the agency s name describes only part of its formal operations the fdic is quasi governmental has a regional structure and sells deposit insurance however the initials fail to convey the fdic s critical place in the governmental regulatory structure as the sole federal overseer of the approximately 8900 state chartered commercial banks that have chosen not to belong the federal reserve system reflecting the federal reserve s membership problem the number of these banks is growing year by year besides selling deposit insurance at bargain explicit rates the fdic performs four regulatory functions 1 entry regulation it passes on new banks applications for deposit insurance and on branch and merger proposals as well thereby protecting the value of existing bank charters 2 examination two thirds of fdic employees are concerned with inspecting bank records and supervising managerial activity 3 regulation of deposit rates and conditions for withdrawal by tradition fdic policies on these matters conform entirely with regulations applicable to federal reserve member banks and 4 disposition of failed banks when an insured bank fails the fdic usually chooses not to liquidate it 2

fixed versus variable rate loans this paper discusses the nature of fixed and variable loan contracts and derives the conditions which determine the optimal quantity of each the results indicate that the payoff functions are quite different and dependent upon the project financed the appropriate conditions for the allocation of loan terms to a set of borrowers are then developed finally the analysis derives the optimal portfolio frontier and risk return trade off for the banking firm here it is demonstrated that the solution is unlikely to be at a point of zero interest rate risk

environmental entitlements dynamics and institutions in community based natural resource management abstract while community based natural resource management cbnrm now attracts widespread international attention its practical implementation frequently falls short of expectations this paper contributes to emerging critiques by focusing on the implications of intracommunity dynamics and ecological heterogeneity it builds a conceptual framework highlighting the central role of institutions regularized patterns of behavior between individuals and groups in society in mediating environment society relationships grounded in an extended form of entitlements analysis the framework explores how differently positioned social actors command environmental goods and services that are instrumental to their well being further insights are drawn from analyses of social difference new dynamic ecology new institutional economics structuration theory and landscape history the theoretical argument is illustrated with case material from india south africa and ghana

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

the future of small farms summary interest in agriculture for growth and poverty reduction reawakened in the early 2000s made all the keener by the sudden rise in cereals prices on world markets in 2007 08 but is it still possible to drive agricultural growth through small farms as happened in the green revolution whether small farms have a future was debated at a workshop held in wye united kingdom in june 2005 it concluded that small farm development is not just desirable for poverty reduction but also feasible even in changing circumstances and particularly those of more concentrated supply chains with more demanding buyers that said while much that needs to be done is straightforward such as provision of public goods fostering the institutional innovations to allow small farmers to deal with the emerging supply chains will require patient work tailored to specific circumstances the future of all smallholders may well not lie in farming but the measures to stimulate the rural nonfarm economy and provide jobs for those leaving farming a favorable rural investment climate provision of public goods institutional development are largely the same as those for agricultural development as well

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

exploring poverty traps and social exclusion in south africa using qualitative and quantitative data abstract recent theoretical work hypothesises that a polarised society like south africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty to explore these ideas this paper employs a mix of quantitative and qualitative methods novel econometric analysis of asset dynamics over the 1993 98 period identifies a dynamic asset poverty threshold that signals that large numbers of south africans are indeed trapped without a pathway out of poverty qualitative analysis of this period and the period 1998 2001 more deeply examines patterns of mobility and confirms the continuation of this pattern of limited upward mobility and a low level poverty trap in addition the qualitative data permit a closer look at the specific role played by social relationships while finding ample evidence of active social capital and networks these are more helpful for non poor households for the poor social capital at best helps sta

yield gap based poverty gaps in rural sub saharan africa summary given africa s challenge of feeding a growing population narrowing yield gaps is an efficient way of raising production under covariate constraints using household panel data from 21 regions in eight sub saharan african countries this article unravels the determinants of yield gaps it also tests the hypothesis that poverty gaps are increasing with yield gaps the results suggest that yield gaps are increasing with cultivated area that yield differences are reducing with fertilizer use particularly when combined with improved seeds in low production potential regions that poverty gaps are increasing with yield gaps particularly in low production potential regions

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

combining income and assets measures to include the transitory nature of poverty in assessments of forest dependence evidence from the democratic republic of congo abstract a considerable amount of research on poverty environment relations in developing countries under the cifor pen initiative focuses on household income generation from forests using total annual income as a measure of poverty however income alone produces a static picture in a snapshot of time while poverty is a dynamic state that can be a transitory phenomenon using income only also fails to consider that households can liquidate asset to overcome income shocks here we show that using asset quintiles measured by value of assets produce a distinctly different pattern than the commonly observed negative relation between income and forest dependence we then present an approach enabling categorization of households as chronic or transient poor transient rich and rich providing a more nuanced picture than that provided by cifor pen studies so far the validity of groupings is tested by comparing household characteristics and exposure to shocks we then show that the chronic poor are most reliant on forest income while the transient poor consume a higher share of harvested forest products the transient rich have higher agricultural productivity and absolute forest income rich households relies more on business based on the results we suggest recommendations for improving future studies on poverty environment relations

to specialize or diversify agricultural diversity and poverty dynamics in ethiopia recent agricultural development policies have begun to shift focus from the promotion of a few staple crops toward encouraging crop diversity the belief is that crop diversification is an effective strategy for dealing with a variety of issues including poverty alleviation however there is a lack of empirical evidence to justify these positions we contribute to filling this research gap by providing quantitative evidence on the impact of diversity in crop cultivation on household poverty using household panel data from ethiopia we develop a diversity index to measure the effect of crop diversity on poverty status to control for endogeneity and selection bias resulting from unobserved heterogeneity we utilize a recently developed parametric method for estimating dynamic binary response models with endogenous contemporaneous regressors our results provide evidence that households which grow a diverse set of crops are less likely to be poor than households that specialize in their crop production additionally crop diversity reduces the probability that a non poor household will fall into poverty and the probability that a poor household will remain in poverty we conclude that crop diversification is a viable way to deal with the exigencies of being poor

understanding poverty in cash crop agro forestry systems evidence from ghana and ethiopia this paper examines the linkages between cash crop income and other dimensions of poverty to interrogate assumptions regarding the relationship between agricultural income and poverty alleviation the analysis treats poverty as a multi dimensional and socially disaggregated phenomenon the paper employs a mixed methods approach to case studies of ghana and ethiopia to explore two critical issues first how income from cash crops is linked with other dimensions of poverty second how income and land are socially disaggregated the paper then draws on qualitative data to critically reflect on how poverty is understood within studied communities the results show that some but not all indicators of poverty vary across income quartiles and that significant differences exist across social groups the analysis suggests that although cash crops are essential focusing on increasing income from cash crops will not necessarily have a predictable or progressive impact on wellbeing furthermore the analysis highlights how contextual factors such as the provision of communal services the nature of land holdings and the quality of local governance mediate the potential poverty alleviating outcomes of income increases future development of sustainable intensification strategies should focus on the prevalence of trade offs and the fundamental social relations underpinning poverty dynamics

how does credit supply respond to monetary policy and bank minimum capital requirements abstract we use data on uk banks minimum capital requirements to study the interaction of monetary policy and capital requirement regulation uk banks were subject to both time varying capital requirements and changes in interest rate policy tightening of either capital requirements or monetary policy reduces the supply of lending lending by large banks reacts substantially to capital requirement changes but not to monetary policy changes lending by small banks reacts to both there is little evidence of interaction between these two policy instruments the differences in the responses of small and large banks identify important distributional consequences within the financial system of these two policy instruments finally our findings do not corroborate theoretical models that raise concerns about complex interactions between monetary policy and macro prudential variation in capital requirements

the evolving role of agriculture in poverty reduction an empirical perspective abstract the role of agriculture in development remains much debated this paper takes an empirical perspective and focuses on poverty as opposed to growth alone the contribution of a sector to poverty reduction is shown to depend on its own growth performance its indirect impact on growth in other sectors the extent to which poor people participate in the sector and the size of the sector in the overall economy bringing together these different effects using cross country econometric evidence indicates that agriculture is significantly more effective in reducing poverty among the poorest of the poor as reflected in the 1 day squared poverty gap it is also up to 3 2 times better at reducing 1 day headcount poverty in low income and resource rich countries including those in sub saharan africa at least when societies are not fundamentally unequal however when it comes to the better off poor reflected in the 2 day measure non agriculture has the edge these results are driven by the much larger participation of poorer households in growth from agriculture and the lower poverty reducing effect of non agriculture in the presence of extractive industries