input promotion within a complex subsector fertilizer in nigeria despite growing evidence that fertilizers can substantially increase yields and slow down environmental degradation in sub saharan africa ssa the region still lags far behind other developing areas in fertilizer use low use rates persist despite numerous efforts to ease farmers access to quality and affordable fertilizer this article reviews the effects of nigeria s fertilizer policies including fertilizer subsidies on fertilizer use we also compare the old government led fertilizer subsidy scheme with the more recent voucher based programs and their potential effects on private fertilizer sector development based on our analysis of nigeria s experience with fertilizer subsidies we identify the potential major challenges to be faced by the new fertilizer subsidy scheme currently being implemented nationwide

the effect of household wealth on fertiliser use in the presence of uncertainty abstractprevious studies of wealth effect on fertiliser use have produced mixed results on the direction of the impact our article looks at this issue from a different perspective by considering the presence of doubts such as about the true content or general effectiveness of fertiliser we show theoretically that there could be different responses between the high wealth and low wealth farmers we analyse also the wealth effect empirically using household panel data from the hebei province of china the results indicate that the direction of wealth effect does indeed change across the different levels of farmers wealth

natural resources curse or blessing are natural resources a curse or a blessing the empirical evidence suggests that either outcome is possible this paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources these include that a resource bonanza induces appreciation of the real exchange rate deindustrialization and bad growth prospects and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law corruption presidential democracies and underdeveloped financial systems another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad induces corruption especially in nondemocratic countries and keeps in place bad policies finally resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets the survey also offers some welfare based fiscal rules for harnessing resource windfalls in developed and developing economies

the big push natural resource booms and growth a simple application of big push reasoning suggests that natural resource booms can be important catalysts for development in poorer countries in this paper we present evidence from seven latin american countries that natural resource booms are sometimes accompa nied by declining per capita gdp we present a model with natural resources increasing returns in the spirit of big push models and expectations to clarify some of the reasons this may happen q 1999 elsevier science b v all rights reserved

social norms and the law an economic approach by social norm norm for short i shall mean a rule that is neither promulgated by an official source such as a court or a legislature nor enforced by the threat of legal sanctions yet is regularly complied with otherwise it wouldn t be a rule the rules of etiquette including norms of proper dress and table manners the rules of grammar and customary law in prepolitical societies and private associations are all examples of norms in my sense a full understanding of law requires consideration of norms law is older than political society which means that it originates as a set of norms as it remains in the case of public international law because there is no world government even in societies that have strong governments norms are both a source of law and often a cheap and effective substitute for law and sometimes they are an antagonist to law the incentives for obeying law are clear enough but what about the incentives for obeying norms the answer to this question will help toward an understanding of the relation between law and norms there are four incentives for obeying norms i some norms are self enforcing the incentive to obey comes from the fact that obedience confers private benefits because they are constitutive of advantageous transactions if you don t speak the language you can t make yourself understood if you don t play chess by the rules you re not playing it at all so if you enjoy playing chess you will not cheat unless the net expected gain is great 2 this point bears on the norms governing judicial behavior of judges not those norms backed by law such as the rule against taking bribes but those subtler norms that adjure the judge to lay aside personal or partisan sympathies disregard public blame or praise follow precedent rather than his own values in short adhere to the traditional rule of law virtues compliance with these norms is far from uniform because there are incentives to deviate and the costs of deviation are small but why is there any compliance the answer is that the private costs of compliance are low because the law backed rules of judicial behavior make it difficult for the judge to profit from partiality while the private benefits are substantial because the rule of law norms are the constitutive rules of the practice of judging if you don t obey them you re not playing the judicial game law school and the judiciary teach the game to new lawyers while judicial selection procedures select for persons who want to play the judicial game rather than some other game such as partisan politics even when judicial appointments are elective rather than appointive or when appointments are based on patronage or ideology rather than merit self selection is present in the decision to seek or accept appointment ii some norms are enforced by the emotions a point vital to understanding the emergence of law the honor code of the old south see jack k williams 1980 will illustrate the code which required a man to challenge to a duel any man who infringed his dignity was a survival of a revenge based system of law more precisely pre law before there were governments what is now called law was u s court of appeals for the seventh circuit and university of chicago law school 1111 e 60th st chicago il 60637 i thank gary becker dan kahan lawrence lessig martha nussbaum eric posner eric rasmusen cass sunstein and yuval tal for many helpful comments on a previous draft i do not require however that it be internalized as a preference as in the definition of norm in gary becker 1996 p 225 2 these are examples of compensated norm imposed constraints becker 1996 p 228 not only must the judge not take bribes but he must not sit in cases in which he or his relatives might derive a pecuniary benefit from his decision

sales location among semi subsistence cassava farmers in benin a heteroskedastic double selection model in much of rural africa high transaction costs limit farmers market participation and thus their potential for income growth transaction costs can affect not only whether a farmer sells product but also whether sales occur at the farm gate or at a market if production behavior is related to a chosen sales location then analysis of interventions can be improved by explicit consideration of the decision of where to sell this article develops a double selection model that explains consumption and production decisions by semi subsistence farmers who first decide whether to be a seller and then whether to sell at the farm gate or at an off farm location before deciding on production and consumption the study tests the validity of this dual criteria model against a single criterion model in which a grower first decides to be a seller and then decides production consumption and sales location simultaneously the results suggest that the dual criteria model provides more information than the single criterion model using a sample of cassava producer in benin

government fertilizer subsidy and commercial sector fertilizer demand evidence from the federal market stabilization program fmsp in nigeria abstract we examine how the previous fertilizer subsidy program in nigeria fmsp affected the demand for commercial fertilizer we apply an endogenous double hurdle model to a pseudo panel and cross section data of farm households the methodology accounts for potential endogeneity of commercial fertilizer price with subsidy our specification is also appropriate where few farmers report the use of both subsidized and commercial fertilizer we find that 100 kg of subsidized fertilizer supplied to a farm household reduced the probability of its participation into commercial fertilizer market by 10 21 points while not affecting fertilizer use upon participation

the human capital effect of general education development certificates on low income women this study examines the impacts of the general equivalency diploma ged certificate and other secondary and post secondary credentials on labor market outcomes for women it uses data from the nlsy mother and children file and the washington state family income study fis correcting for sample selection and endogeneity bias of welfare recipiency we find that one cannot distinguish between secondary dropouts ged recipients and secondary graduates in hours of work results on hourly wage rates are mixed for the fis sample ged recipients secondary graduates and secondary dropouts earn the same wage for the nlsy ged recipients fare better than dropouts but worse than secondary graduates job experience explains the wage gap between ged recipients and graduates but its explanatory power is dominated by controlling for years of education or afqt differences in years of education and afqt scores are responsible for the observed wage differences among ged recipients secondary graduates and secondary dropouts

the effect of food subsidies on labor supply in sri lanka cash transfers or consumer subsidies can have substantial impacts on labor supply and thus on the level of net benefits of welfare programs under the standard theory of household utility maximization over leisure as well as goods a change in exogenous income or in the price of commodities will affect labor allocation as well as commodity choice ravi kanbur michael keen and matti tuomala show that the implications of transfers for labor supply are particularly important from a nonwelfarist perspective in which increasingly the consumption of certain goods often food rather than total household utility is the objective of the program in contrast from a welfarist perspective the consumption of leisure is valued at the marginal wage rate and treated as other commodities and thus utility is increased regardless of the consumption of commodities welfarist and nonwelfarist perspectives diverge with regard to not only marginal taxation and subsidies but targeting criteria as well for example kanbur keen and tuomala show that under nonwelfarist criteria the effectiveness of an income transfer targeted on the basis of indicators correlated with poverty depends on labor supply behavior everything else being equal groups with more elastic labor supply mitigate the effectiveness of a transfer in reducing poverty thus robert moffitt states the following in a recent review the lack of research on the effects of in kind transfer programs on labor supply is a serious problem in light of the critical role such transfers have played in the united states 2 this is concluded with full knowledge that there have been some relevant studies examining the labor supply effects of programs in the united states such as the

resource curse or not a question of appropriability this thesis presents three self contained essays focusing on empirical questions in growth and development economics each article addresses specific questions on why countries perform differently in particular i analyse the effect of democracy on economic development the relationship between natural resources and growth and the efficiency of foreign development assistance in the first essay democracy consolidation and growth i analyse the effect of democracy on economic growth in this context i argue that an important aspect to consider is how consolidated political systems are put simply i find that it is not only a question of how democratic countries are but also how long they have been democratic in other words economic performance tends to improve with the duration of uninterrupted democracy the performance of autocracies on the other hand tends to deteriorate over time however for newly established political systems there seems to be a cost of being democratic this implies that democracies only bear their fruit after some time the analysis has important policy implications to overcome initial straits international assistance focused on democratic consolidation may be important and a very good investment in fostering long run development the second essay resource curse or not a question of appropriability together with anne boschini and jesper roine is concerned with the relation between natural resources and economic development for most laymen as well as for most economists it would seem reasonable that countries richly endowed in natural resources also benefit from this wealth however a large literature has found a systematic negative effect of natural resource abundance on economic growth we suggest that this so called resource curse is not determined by resource endowments alone but rather by the interaction between the type of resources a country possesses and the quality of institutions in the country this combination of factors determines what we call the appropriability of a resource the concept of appropriability captures the likelihood of natural resources leading to rentseeking corruption or conflicts which in turn will harm economic development our results suggest that if institutions are good enough the curse may be turned into a blessing this may explain why some countries such as norway and botswana tend to benefit from their resources while others such as angola and sierra leone do not the third and final essay of this thesis foreign sectoral aid fungibility growth and poverty reduction is a contribution to the aid efficiency literature which is concerned with the question of whether aid helps or hinders economic development foreign development assistance is often targeted on specific public expenditure sectors if this aid is not used in the sector for which it was granted e g health education it is said to be fungible and donors may end up financing something completely different from what they intended e g military expenditures the major concern about sectoral fungibility is that the alternative use of aid may be less productive or less socially useful however measuring fungibility is not sufficient to determine whether foreign sectoral aid fungibility is actually harmful what is important is how the funds treated as fungible are used the essay starts by obtaining estimates of fungibility for 57 countries the results suggest that sectoral aid is indeed largely treated as fungible by recipient countries next to assess the economic and health effects of fungibility these estimates are incorporated into an empirical model of aid and growth as well as into a model of aid and infant mortality altogether i find no evidence of more fungible sectoral aid leading to worse performance

implications for gaap from an analysis of positive research in accounting based on extant literature we review the positive theory of gaap the theory predicts that gaap s principal focus is on control performance measurement and stewardship and that verifiability and conservatism are critical features of a gaap shaped by market forces we recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets but caution against expanding fair values to financial reporting more generally we conclude that rather than converging u s gaap with ifrs competition between the fasb and the iasb would allow gaap to better respond to market forces

rent seeking and resource booms abstract this paper develops a model of rent seeking in which the opportunity cost of rent seeking is foregone entrepreneurship it provides conditions under which resource booms tend to lead to an increase in rent seeking activity and those in which they induce entrepreneurship we identify an important difference between the two activities which leads resource booms to bias gains in favour of rent seeking over entrepreneurship but we also show that this bias depends on the nature of the initial equilibrium

the dutch disease a disease after all many third world oil producers are encountering serious problems in building up a diversified export base while west european oil and gas producers netherlands united kingdom are suffering a decline in their traded goods manufacturing sector induced by real wage pressures it is becoming increasingly clear that high but temporary oil revenues may be somewhat ora mixed blessing the quip of the economist notwithstanding the mechanism behind this unbalance is clear enough part of the oil revenues is spent on non traded goods which leads to a real appreciation i e a rise in the relative price of non traded goods in terms of traded goods this in turn draws resources out of the non oil traded sector into the non traded goods producing sector corden and neary 1982 van wijnbergen 1980 one may say that this is an efficient response to the increase in income from oil production the united kingdom mexico egypt simply should move into oil derived industries and non traded goods and forget about their manufacturing sector until oil reserves are exhausted however many developing countries are hesitant to take this advice after all the post world war ii success stories in economic development involve without exception countries that promoted their traded goods sector aggressively moreover it is a well established stylised fact that technological progress is faster in the traded non sheltered sectors of an economy than in the non traded sector balassa 1964 is an early reference considering the hypothesis that technological progress rather than taking place exogenously with the passage of time is a function of accumulated experience the concern of countries like egypt mexico or indonesia is much easier to understand since solow 1957 and denison 1962 it is known that capital accumulation explain only a small part of economic growth if most of economic growth is caused by learning by doing induced technologica

the voracity effect abstract we analyze an economy that lacks a strong legal political institutional infrastructure and is populated by multiple powerful groups powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock in equilibrium this leads to slow economic growth and a voracity effect by which a shock such as a terms of trade windfall perversely generates a more than proportionate increase in fiscal redistribution and reduces growth we also show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks jel f43 o10 o23 o40

using natural resources for development why has it proven so difficult developing economies have found it hard to use natural resource wealth to improve their economic performance utilizing resource endowments is a multistage economic and political problem that requires private investment to discover and extract the resource fiscal regimes to capture revenue judicious spending and investment decisions and policies to manage volatility and mitigate adverse impacts on the rest of the economy experience is mixed with some successes such as botswana and malaysia and more failures this paper reviews the challenges that are faced in successfully managing resource wealth the evidence on country performance and the reasons for disappointing results

cursed by resources or institutions natural resource abundant countries constitute both growth losers and growth winners and the main difference between the success cases and the cases of failure lays in the quality of institutions with grabber friendly institutions more natural resources push aggregate income down while with producer friendly institutions more natural resources increase income such a theory finds strong support in data a key question we also discuss is if resources in addition alter the quality of institutions when that is the case countries with bad institutions suffer a double resource curse as the deterioration of institutions strenghtens the negative effect of more natural resources

employment determination in enterprises under communism and in transition evidence from central europe the authors present a comparative analysis of employment determination in four transition economies as they moved from central planning to a market economy in the early 1990s they use firm level panel data sets from the czech republic hungary poland and slovakia to estimate dynamic employment equations for the period from immediately before to immediately after the start of transition for the most part firms appear to have been quick to adjust employment to wage levels and there is little evidence of labor hoarding there were important cross country variations in the determinants of employment during the reform process however hungarian and polish firms started the transition already substantially reformed and became even more responsive to market signals as transition proceeded in contrast firms in the czech and slovak republics started in the completely unresponsive mode characteristic of central planning but rapidly caught up with their counterparts in hungary and poland

do vouchers improve government fertilizer distribution evidence from nigeria government distribution of subsidized fertilizer in sub saharan africa is often characterized by cumbersome administrative processes and diversion of the product from the proclaimed beneficiaries this study uses propensity score matching techniques to analyze an input voucher program in nigeria that was meant to demonstrate an alternative and more efficient distribution mechanism for subsidized fertilizer we find that participants in the 2009 voucher program received more bags of subsidized fertilizer than nonparticipants and also paid significantly lower prices compared to those who purchased directly from the market on average however participating in the voucher program did not improve the timeliness of fertilizer receipt or the quality of the product where statistically significant participating in the program increased the likelihood that the product was received late and that some complaint about the product s quality was made as many developing countries particularly in sub saharan africa adopt the use of input vouchers or scale up already existing programs this study demonstrates when the distribution of subsidized fertilizer via vouchers improves farmers timely access to good and more affordable fertilizer it highlights some key issues to be considered in order to expand the dimensions of success of well targeted input voucher programs

canada s dependence on natural capital wealth was innis wrong canada has abundant natural resources its stock of natural capital wealth a recurring debate in the literature is whether resource rich countries benefit in the form of higher sustained growth rates or not from the export of their natural resources canada s harold innis wrote extensively on this subject over 80 years ago and argued for the no side in the debate was he was right or wrong i begin with the foundations of natural resource theory then turn to empirical work in recent decades i agree with the literature that canada overall has benefited from the export of its natural resources but question whether that can continue given the focus on short term growth and the failure to account for the social costs of resource extraction and use the environmental externalities that degrade and reduce stocks of natural capital these externalities increasingly threaten our water and land resources and without more effective policy the ability of resources to sustain growth and well being is questionable was innis wrong yes in that the evidence supports the counter argument resources have helped canada become a developed economy with relatively high incomes and sustained growth rates innis was right that the uneven distribution of resources causes different impacts regionally especially during booms and busts and recognized the need to find substitutes for declining and degrading resource stocks but innis like many after him focused more on the intrinsic features of natural resources than policy to address the social costs of their development a legacy that leaves us in a precarious position today

enforced standards versus evolution by general acceptance a comparative study of e commerce privacy disclosure and practice in the united states and the united kingdom we present data on privacy practices in e commerce under the european union s formal regulatory regime prevailing in the united kingdom and compare it with the data from a previous study of u s practices that evolved in the absence of government laws or enforcement the codification by the e u law and the enforcement by the u k government improves neither the disclosure nor the practice of e commerce privacy relative to the united states regulation in the united kingdom also appears to stifle development of a market for web assurance services both u s and u k consumers continue to be vulnerable to a small number of e commerce web sites that spam their customers ignoring the latter s expressed or implied preferences these results raise important questions about finding a balance between enforced standards and conventions in financial reporting in the second half of the 20th century financial reporting has been characterized by both a preference for legislated standards and a lack of faith in its evolution as a body of social conventions evidence on whether this faith in standards over conventions is justified remains to be marshaled

the genetics revolution economics ethics and insurance this paper considers the revolutionary developments occurring in the field of genetic mapping and the genetic identification of disease propensities these breakthroughs are discussed relative to the ethical and economic implications for the insurance industry individual s privacy rights and rights to employment must be weighed against the insurers desire for better estimates of future loss costs associated with health life and other insurances these are in turn related to the fundamental conception of insurance as a financial intermediary versus insurance as a vehicle for social policy

subsidies and crowding out a double hurdle model of fertilizer demand in malawi this article uses a double hurdle model with panel data from malawi to investigate how fertilizer subsidies affect farmer demand for commercial fertilizer the article controls for potential endogeneity caused by the nonrandom targeting of fertilizer subsidy recipients results show that on average 1 additional kilogram of subsidized fertilizer crowds out 0 22 kg of commercial fertilizer but crowding out ranges from 0 18 among the poorest farmers to 0 30 among relatively nonpoor farmers this indicates that targeting fertilizer subsidies to the rural poor is likely to maximize the contribution of the subsidy program to total fertilizer use

an ordered tobit model of market participation evidence from kenya and ethiopia do rural households in developing countries make market participation and volume decisions simultaneously or sequentially this article develops a two stage econometric method to test between these two competing hypotheses regarding household level marketing behavior the first stage models the household s choice of whether to be a net buyer autarkic or a net seller in the market the second stage models the quantity bought sold for net buyers sellers based on observable household characteristics using household data from kenyan and ethiopian livestock markets we find evidence in favor of sequential decision making the welfare implications of which we discuss

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

history lessons institutions factor endowments and paths of development in the new world the explanations offered for the contrasting records of long run growth and development among the societies of north and south america most often focus on institutions the traditional explanations for the sources of these differences in institutions typically highlight the significance of national heritage or religion we in contrast argue that a hemispheric perspective across the wide range of colonies established in the new world by the europeans suggests that although there were many influences factor endowments or initial conditions had profound and enduring effects on the long run paths of institutional and economic development followed by the respective economies

institutions and the resource curse countries rich in natural resources constitute both growth losers and growth winners we claim that the main reason for these diverging experiences is differences in the quality of institutions more natural resources push aggregate income down when institutions are grabber friendly while more resources raise income when institutions are producer friendly we test this theory building on sachs and warner s influential works on the resource curse our main hypothesis that institutions are decisive for the resource curse is confirmed our results contrast the claims of sachs and warner that institutions do not play a role

natural resources rent seeking and welfare abstract a new and very simple mechanism to explain why natural resource abundance may lower income and welfare is developed in a model with rent seeking a greater amount of natural resources increases the number of entrepreneurs engaged in rent seeking and reduces the number of entrepreneurs running productive firms with a demand externality it is shown that the drop in income as a result of this is higher than the increase in income from the natural resource more natural resources thus lead to lower welfare

increasing returns and the genesis of american resource abundance the usa became the world s leading mineral producing nation between 1870 and 1910 a development paralleled by the rising resource intensity of american manufacturing this paper challenges the premise that resource abundance simply reflected the country s geological endowment of mineral deposits instead in the century following 1850 the usa exploited its natural resource potentials to a far greater extent than other countries and did so across virtually the entire range of industrial minerals the paper argues that natural resource abundance was an endogenous socially constructed condition that was not geologically preordained it examines the complex legal institutional technological and organizational adaptations that shaped the us supply responses to the expanding domestic and international industrial demands for minerals and mineral products it suggests that strong positive feedbacks even in the exploitation of depletable resources were responsible for the explosive growth of the american minerals economy

gold exploitation and socioeconomic outcomes the case of burkina faso abstract in the early 2000s burkina faso launched several legal reforms aimed at increasing gold production this resulted in a gold mining boom making gold the main export product and the main source of economic growth of the country we hypothesize that gold extraction improved population living standards this paper investigates how the gold boom in burkina faso which began in 2007 has affected socioeconomic outcomes we use a simple theoretical model to motivate the testing of several hypotheses regarding these impacts employing a difference in differences strategy as well as panel data models we estimate the impacts using data from household surveys undertaken in 2003 and 2009 and administrative data consistent with our model the results suggest that areas hosting gold extraction have better average living standards in terms of headcount ratios poverty gaps and household expenditures than do areas without gold however the gold boom is also shown to have potentially increased local inequality and child labor in areas with these income gains these results demonstrate the importance of proactive government policy in mitigating negative welfare impacts

is increasing inorganic fertilizer use for maize production in ssa a profitable proposition evidence from nigeria inorganic fertilizer use across sub saharan africa is generally considered to be low yet the notion that fertilizer use is too low is predicated on the assumption that it is profitable to use rates higher than currently observed there is however limited empirical evidence to support this using a nationally representative panel dataset this paper empirically estimates the profitability of fertilizer use for maize production in nigeria we find that fertilizer use in nigeria is not as low as conventional wisdom suggests low marginal physical product and high transportation costs significantly reduce the profitability of fertilizer use apart from reduced transportation costs other constraints such as soil quality timely access to the product and availability of complementary inputs such as improved seeds irrigation and credit as well as good management practices are also necessary for sustained agricultural productivity improvements

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

learning by doing and the dutch disease this paper develops a model of learning by doing and the dutch disease that extends the earlier literature in two ways first it is assumed that both the traded and the non traded sector can contribute to learning second it is assumed that there are learning spillovers between the sectors it is shown that within such a model a foreign exchange gift results in a real exchange rate depreciation in the long run due to a shift in the steady state relative productivity between the traded and the non traded sector in contrast to standard models of the dutch disease production and productivity in both sectors may go up or down the conditions for the different cases are worked out

to target or not to target the costs benefits and impacts of indicator based targeting abstract this paper assesses the cost effectiveness of indicator based targeting using household survey data from malawi we examine whether an indicator based system is more target and cost efficient in reaching the poor than universal systems and the currently used mechanisms for targeting agricultural subsidies in the country estimation results suggest that targeting malawi s poor and smallholder farmers with indicator based systems may be worth the extra effort and may improve program targeting and cost efficiency even though under the proposed system administrative costs increase simulation results indicate that it does not make a targeted program cost ineffective more importantly the proposed system appears to be more target and cost efficient than the 2000 2001 targeted input program tip and the 2006 2007 agricultural input support program aisp both of which were administered through community based targeting systems while tip and aisp transferred about 50 of total transfer under the proposed system about 73 of transfers are delivered to the poor and smallholder farmers additionally the costs of leakage to the non poor are cut by more than 50 under the proposed system we conclude from the above findings that the newly proposed system can potentially improve the targeting and cost efficiency of malawi s development programs however such improvements depend on actual implementation of targeted programs a critical issue that should not be set aside

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

insecure resources bilateral trade and endogenous predation a game theoretic analysis of conflict and trade this article analyzes how interstate conflict over resources affects the incentives to trade and how greater trade openness affects the endogenous decisions of arming by enemy countries we identify conditions under which there is trade between two adversary countries and show that each adversary s arming affects domestic welfare in three different ways the first is an export revenue effect which increases welfare because arming causes export revenue to go up i e there is an arming induced terms of trade improvement the second is a resource predation effect which increases welfare because arming increases the appropriation of a rival country s resource input to produce a consumption good the third is an output distortion effect which reduces welfare because arming lowers the domestic production of civilian goods based on these effects we show circumstances in which greater trade openness reduces the intensity of arming we also discuss the implications of resource security asymmetry for conflict and trade

fertilizer subsidies political influence and local food prices in sub saharan africa evidence from nigeria abstract the last decade has seen a resurgence in the use of fertilizer subsidies in sub saharan africa however there is limited empirical evidence on the effects of fertilizer subsidy programs on local food prices using an instrumental variables approach we explore the effect of a fertilizer subsidy program on the seasonal growth rates of grain prices in nigeria our results suggest that the fertilizer subsidy program had very small effects on the growth rates of grain prices between the post planting and post harvesting seasons we also find that political influence played a role in the distribution of subsidized fertilizer we discuss how the weak effects on the price growth rates may be caused by low market orientation output market structures greater focus on farmers incomes low marginal productivity of fertilizer and politically influenced targeting

cointegrating institutions the time series properties of country institutional measures abstracta country s political and economic institutions are critical for economic prosperity the literature abounds with institutional measures precisely because institutions are multidimensional we use panel unit root and cointegration tests to examine the time series properties of several institutional measures to answer two questions first do institutional changes tend to be permanent second which subsets of institutions tend to converge or move together these answers have important implications for whether permanent institutional reform is possible and whether reforms can be undertaken one institutional area at a time or instead must simultaneously encompass multiple institutional areas

kleptocracy and divide and rule a model of personal rule many developing countries have suffered under the personal rule of kleptocrats who implement highly inefe cient economic policies expropriate the wealth of their citizens and use the proceeds for their own glorie cation or consumption we argue that the success of kleptocrats rests in part on their ability to use a divide and rule strategy made possible by the weakness of institutions in these societies members of society need to cooperate in order to depose a kleptocrat yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move and redistributing the benee ts to those who need to agree to it thus the collective action problem can be intensie ed by threats which remain off the equilibrium path in equilibrium all are exploited and no one challenges the kleptocrat kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents when opposition groups are shortsighted when the average productivity in the economy is low and when there is greater inequality between producer groups because more productive groups are more dife cult to buy off jel o12 h00

heterogeneous returns to chemical fertilizer at the intensive margins insights from nepal increased fertilizer use is considered important for agricultural development in low income countries promoting increased use of chemical fertilizer by lowering its price may be ineffective if demand is price inelastic in theory the price elasticity of demand depends on the returns to its use but the evidence is scarce furthermore while returns are often estimated for small changes in chemical fertilizer use returns to larger changes in its use intensive margins are less understood through the inter zonal comparisons in nepal we provide indicative evidence that greater returns to chemical fertilizer are associated with greater price elasticities of demand moreover the evidence suggests that returns at the intensive margins rather than returns to small changes may largely account for inter zonal differences in returns to chemical fertilizer within nepal the results suggest that better understanding the returns at the intensive margins is critical for effective agricultural inputs policies in developing countries

studying the role of political competition in the evolution of government size over long horizons here we argue for the use of cointegration and error correction analysis to combine economic factors that are nonstationary with political factors that are stationary into an empirical model of the evolution of public policy over long periods the approach is applied to disentangle the contributions of economics and politics to the evolution of public expenditure by the government of canada over 130 years political competition emerges as the primary political factor affecting government size

economic backwardness in political perspective government policies and institutions shape economic incentives and via this channel have a first order impact on economic development why then do many societies adopt policies that discourage investment and maintain institutions that cause economic backwardness perhaps politically powerful groups elites are not in favor of economic growth but why it would appear that economic growth would provide more resources for these groups to take over or tax increasing their economic returns so why don t powerful groups always support economic development in this paper we develop a theory of inefficient government policies and institutions all else equal politically powerful groups would welcome superior institutions and technologies but in practice all else is not equal because superior institutions and technologies may reduce their political power and make it more likely that they will be replaced at the center of our theory is therefore the idea that changes in institutions or the introduction of new technologies often create turbulence eroding the political advantages and future economic rents of incumbent elites alternatively new technologies may enrich competing groups increasing their threat to incumbents these considerations make politically powerful groups fear losing power and oppose economic and political change even when such change will benefit society as a whole to understand the mechanism at work and its potential applications consider a concrete example industrialization in the nineteenth century bairoch 1982 estimates that between 1830 and 1913 world manufacturing output increased by a factor of 5 see table 1 panel a nevertheless this process was highly uneven across regions and countries bairoch also calculates that over the same period manufacturing output in developed countries europe and north america increasedbyafactorofover10 whereasitdeclinedinthe third world among developed countries there were

do input subsidy programs crowd in or crowd out commercial market development modeling fertilizer demand in a two channel marketing system many governments in developing countries distribute fertilizer at subsidized prices in an effort to stimulate small farmers agricultural productivity and food security prior fertilizer demand studies have largely failed to account for the effects of government programs on farmers commercial purchases using a double hurdle model and nationally representative rural household panel data in zambia we distinguish between these sources and measure the contemporaneous crowding in and crowding out effects of government input programs on commercial fertilizer sales where the private sector is relatively active and average wealth is higher areas seemingly more likely to be targeted by government programs results indicate that subsidies have substantially crowded out the private sector in some cases to the point that such programs could actually lower overall fertilizer use on the other hand in poorer areas where the private sector is relatively inactive subsidies help to generate demand and crowd in private sector retailers empirical studies explicitly modeling farmers fertilizer purchase behavior within a dual marketing framework can provide important insights for agricultural policy discussions in developing countries

political foundations of the resource curse in this paper we argue that the political incentives that resource endowments generate are the key to understanding whether or not they are a curse we show 1 politicians tend to over extract natural resources relative to the efficient extraction path because they discount the future too much and 2 resource booms improve the efficiency of the extraction path however 3 resource booms by raising the value of being in power and by providing politicians with more resources which they can use to influence the outcome of elections increase resource misallocation in the rest of the economy 4 the overall impact of resource booms on the economy depends critically on institutions since these determine the extent to which political incentives map into policy outcomes countries with institutions that promote accountability and state competence will tend to benefit from resource booms since these institutions ameliorate the perverse political incentives that such booms create countries without such institutions however may suffer from a resource curse

how do mineral states learn path dependence networks and policy change in the development of economic institutions summary based on case study methods i draw lessons from the political economy of macroeconomic management in chile and peru to explain how mineral states learn to think long term and eventually escape the resource curse i give an institutionalist account of the rise of countercyclical funds showing how the long term development of elite networks qualifies the contemporary making of curse escapes policy networks compose one central avenue of institutional development for both the reproduction of path dependence and the making of institutional change the exposition challenges political economy of development frameworks which over emphasize structural initial conditions and assume steady rent seeking behavior of state agents

minerals institutions openness and growth an empirical analysis competing explanations of the resource curse are tested using panel data the data support the existence of a mineral resource curse for developing countries with weak institutions consistent with the hypothesis that owners of mineral resources use weak institutions and openness to trade to stifle the development of human capital to the detriment of growth in other sectors of the economy manufacturing imports substitute for the development of domestic production so openness to trade correlates with lower growth in mineral dependent economies the dutch disease and debt overhang explanations of the resource curse are not supported

do fertilizer subsidies crowd out organic manures the case of malawi we assess the impacts of the malawian farm input subsidy program on manure use at the farm plot level using more than 3 000 farm plot observations from six districts in central and southern malawi over three years 2006 2007 and 2009 the probabilities and intensities of manure use were investigated with the correlated random effects cre probit and tobit models the endogeneity of access to fertilizer subsidies and fertilizer use intensity was controlled for with a control function approach both the probability of manure use and intensity of manure use were positively correlated with the intensity of fertilizer use a 1 increase in fertilizer use intensity is associated with a 1 94 1 96 increase in the intensity of manure use outside the subsidy program and a 0 62 1 66 increase in manure use with the subsidy program a 1 increase in average fertilizer price was associated with a 0 43 0 76 increase in the probability of manure use and a 3 5 5 3 increase in the intensity of manure use

trade matters in the fight against poverty narratives perceptions and lack of evidence in the case of fish trade in africa two opposing views exist in the literature on the potential role that international fish trade plays in economic development while some claim that fish trade has a pro poor effect others denounce the negative effect of fish export on local populations food security and doubt its contributions to the macro economy in this paper we explore this debate in sub saharan africa our analysis did not find any evidence of direct negative impact of fish trade on food security neither did it find evidence that international fish trade generates positive pro poor outcomes this paper discusses the possible reasons for this apparent lack of development impact and highlights the unsupported assumptions underlying the current discourse about international fish trade we suggest that given lack of evidence for the development benefits of fish trade between africa and developed countries fisheries policy could consider support for regional africa to africa trade that meets the growing african demand for lower value fish means of overcoming barriers to intra african trade in fish are discussed

natural resources and the tradeoff between authoritarianism and development abstract why do african and middle eastern countries seem cursed by an abundance of natural resources yet usa australia and norway seem blessed a growing literature has argued that the benevolence or malignance of natural resources depends upon the quality of institutions this paper offers a new explanation based on associational freedom and its interaction with the political system the model predicts that natural resources have an adverse impact on economic performance and transition to democracy in authoritarian regimes but not in democracies it also predicts that repression of associational freedom will be increasing in natural resources in authoritarian regimes i test the model s predictions using fixed effects regressions on an international panel from 1975 to 2000 and find support

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item