resource degradation and adoption of land conservation technologies in the ethiopian highlands a case study in andit tid north shewa abstract this paper reports results from a study of resource degradation and conservation behavior of peasant households in a degraded part of the ethiopian highlands peasant households choice of conservation technologies is modeled as a two stage process recognition of the erosion problem and adoption and level of use of control practices an ordinal logit model is used to explain parcel level perception of the threat of the erosion problem and the extent of use of conservation practices results show the importance of perception of the threat of soil erosion household land and farm characteristics perception of technology specific attributes and land quality differentials in shaping conservation decisions of peasants furthermore where poverty is widespread and appropriate support policies are lacking results indicate that population pressure per se is unable to encourage sustainable land use the challenge of breaking the poverty environment trap and initiating sustainable intensification thus require policy incentives and technologies that confer short term benefits to the poor while conserving the resource base

non farm income household welfare and sustainable land management in a less favoured area in the ethiopian highlands a bio economic model has been calibrated to the socio economic and biophysical characteristics of a less favoured area in the ethiopian highlands land degradation population growth stagnant technology and drought necessitates development of non farm employment opportunities in the area the model has been used to assess the impact of improved access to non farm income on household welfare agricultural production conservation investments and land degradation in the form of soil erosion the model simulations indicate that access to low wage off farm income is restricted by lack of employment opportunities since households otherwise would have engaged in more off farm wage employment than observed the simulations show that better unconstrained access to low wage non farm income has a substantial positive effect on household income total agricultural production crop and livestock production and farm inputs used are reduced when access to non farm employment is improved and thus increases the need to import food to the area access to non farm income reduces farm households incentives to invest in conservation and this leads to more overall soil erosion and more rapid land degradation even though intensity of production is reduced special policies are therefore needed to ensure land conservation and to sustain local food production

land degradation drought and food security in a less favoured area in the ethiopian highlands a bio economic model with market imperfections abstract this paper presents a bio economic model of andit tid a severely degraded crop livestock farming system with high population density and good market access in the highlands of ethiopia land degradation population growth stagnant technology and drought threaten food security in the area drought or weather risk appears to have increased in recent years the bio economic model is used to analyse the combined effects of land degradation population growth market imperfections and increased risk of drought on household production welfare and food security we find that the indirect effects of drought on household welfare through the impact on crop and livestock prices are larger than the direct production effects of drought provision and adoption of credit for fertiliser although risky in itself may lead to increased grain production and improved household welfare and food security provision of credit may have a negative effect on conservation incentives but this effect may be mitigated by linking a conservation requirement to the provision of credit for fertiliser

combination monetary policies to stabilize price and output under rational expectations sargent and wallace 1 1 12 conclude that in a model with a lucas type supply curve and the assumption of rational expectations there is no sense in which the monetary authority has the option to conduct countercyclical policy 12 p 177 sargent and wallace confine their analysis to pure money stock or interest rate policies woglom 14 drawing on the earlier work of poole 10 leroy 5 and leroy and waud 6 examines the effectiveness of combination policies within a model where expectations are formed rationally and with a lucas type supply schedule within the poole or woglom models a combination policy amounts to setting a deterministic relationship between the money stock and the interest rate leroy and leroy and waud make clear that the ability to execute such combination policies depends on the current observability to the monetary authority of the interest rate and money stock or level of reserves in the leroywaud framework since the monetary authority s policy setting is conditioned on such current information while in woglom s framework private agents expectations are conditioned only on past information systematic policy actions the parameters of the combination policy will affect the distribution of real output the sargent wallace

learning theory and the logic of critical mass the oliver marwell theory of critical mass is a prominent solution to the free rider problem that plagues collective action in large groups i reformulate the theory as a stochastic learning model in which cooperative responses are shaped by the social sanctions and cues generated by the responses of others this relaxes four assumptions in the original formulation that the actors are rational decisions are isolated events outcomes are deterministic and public goods have pure jointness of supply and collective profit computer simulations then show how adaptive actors become trapped in a suboptimal equilibrium and how they escape through attainment of critical mass start up problems arise from accommodation to social costs and not from low returns to early contributors as previously believed simulations also identify a new dilemma of group size and show why solidarity tends to emerge in response to crisis finally normative solidarity appears to be a consequence rather than cause of critical mass but may promote recovery from random deviance

nonfarm income diversification and household livelihood strategies in rural africa concepts dynamics and policy implications abstract asset activity and income diversification lie at the heart of livelihood strategies in rural africa this paper introduces a special issue on the topic income diversification and livelihoods in rural africa cause and consequence of change we concentrate on core conceptual issues that bedevil the literature on rural income diversification and the policy implications of the empirical evidence presented in this special issue

a new solution to the collective action problem the paradox of voter turnout macy s work offers a potential solution to the paradox of voter turnout the stochastic learning theory of voter turnout kanazawa 1998 posits that citizens perceive a correlation between their behavior voting versus abstention and the outcome of collective action win versus loss for their candidate and that they interpret the outcome as a reinforcer or a punisher the theory can solve the paradox of voter turnout because now p the probability that one s vote is or appears decisive equals approximately 500 in the calculus of voting model instead of p 0 i use general social survey data to test the theory the empirical results indicate that citizens make their turnout decisions according to the win stay lose shift pattern predicted by the stochastic learning theory especially if there are no strong third party candidates

a farm household model for agri food policy analysis in developing countries application to smallholder farmers in sierra leone this paper presents a generic farm household model for use in the context of developing countries to gain knowledge on food security and rural poverty alleviation under different policy options it is a static positive programming model which simultaneously solves a set of microeconomic farm models reproducing the behaviour of representative individual farm households this model is designed to capture key features of developing countries agriculture such as the non separability of production and consumption decisions due to market imperfections the inter linkage between transaction costs and market participation decisions the interaction among farm households for factor markets and the seasonality of resource use model use is illustrated in this paper by simulating the impact of rice seed policy on the livelihood of representative smallholder farmers in sierra leone results show that the seed policy would improve farm productivity and boost household income but that it is not sufficient to fight poverty since 90 of the surveyed farm households would continue to live below the extreme poverty line of 1 usd equivalent per person per day

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

access to capital and its impact on agrarian structure and productivity in kenya access to capital and its distribution across agents can profoundly shape the structure and performance of an agrarian market economy it is conceptually useful to distinguish between ex ante and ex post capital access ex ante capital access denotes the ability of agents to finance production costs e g labor and purchased inputs costs which must be paid ex ante that is prior to the actual realization of production ex post capital access that is access to capital after the realization of the production process is of particular importance as an insurance substitute in low income agrarian economies where contingency markets are imperfect buoyant ex post capital access would permit an individual to stabilize consumption year to year even as production fluctuates annually a number of theoretical models have ex

the effect of nonfarm income on investment in bulgarian family farming this article documents a relationship between nonfarm income primarily earnings and pensions and agricultural investment in bulgaria specifically expenditures on working capital variable inputs such as feed seed and herbicides and investment in livestock among those with positive spending on farm inputs the estimated elasticity of these expenditures with respect to nonfarm income is 0 14 nonfarm income also has an effect on the number of households that purchase farm animals with an estimated elasticity of 0 35 the use of nonfarm income for farm investment is consistent with the presence of credit constraints as is the fact that less than one percent of farmers report outstanding debts for agricultural purposes yet many farm households take out large unsecured loans for other purposes primarily to cover consumption expenditures implying that credit is available but that farmers prefer not to use borrowed funds to finance agricultural investment this would suggest that increases in the availability of agricultural credit may have little effect on farm outcomes whereas increases in nondebt financed sources of liquidity such as subsidies or transfers may better stimulate investment

the dynamics of livelihood diversification in post famine ethiopia abstract based on data for almost 300 households this paper explores associations among income diversification household perceptions of livelihood risks and changes in consumption outcomes across two points in time in post famine ethiopia four key questions are addressed i to what extent did households emerging from the famine period with relatively higher income and calorie consumption levels also have a more diversified income base ii was higher income diversification in 1989 associated with higher income and consumption levels by 1994 iii which households increased their share of income from non cropping activities most during the inter survey years and iv did household heads perceive a lack of non farm income activities to be an important risk factor in famine vulnerability we find that wealthier households tended to have more diversified income streams those initially more diversified subsequently experienced a relatively greater increase in both income and calorie intake households with a greater concentration of assets were more likely to fall in their relative outcome ranking as were female headed households and initially less diversified households subsequently realized greater gains in income diversification we also find suggestive evidence that personal perceptions of risk factors guided subsequent diversification decisions

deposit market deregulation and interest rates the evolving deregulation of financial markets has sparked interest in the economic implications of increased flexibility in previously regulated markets much of the analysis has focused on deposit markets in which legislated maximum rates are being replaced by market determined equilibrium rates moreover because changes in deposit rates imply changes in the cost of funds to financial intermediaries concern has been voiced about the implications of deposit rate deregulation on the overall structure of interest rates specifically deregulation has been cited as one reason for the currently high rates of interest 2 in this paper we argue that this view of deregulation is flawed and we suggest that deregulation of deposit markets will lead to lower not higher loan and deposit rates furthermore we argue that previous analysis indicating that deposit deregulation leads to higher loan rates based on higher costs of funds to financial intermediaries depends on inadequate consideration of the role of implicit payments to depositors appropriate consideration of these implicit payments leads to results suggesting that deposit market deregulation should ceterus paribus lower loan rates the total cost of funds to banks falls as the interest rate ceiling is relaxed our theoretical results previewed here are admittedly at odds with some of the prior theoretical and empirical work on this issue our assumptions that the implicit deposit rate is flexible market determined and adjusts to clear the deposit market are crucial to our results

a theory of the critical mass i interdependence group heterogeneity and the production of collective action collective action usually depends on a critical mass that behaves differently from typical group members sometimes the critical mass provides some level of the good for others who do nothing wh

backward looking social control rational choice theorists stress the need for social control to overcome the free rider problem in collective action critics counter that mechanisms for monitoring and enforcement are themselves public goods that presume collective action rather than explain it in response heckathorn 1989 proposed an analytic solution based on hypocritical cooperation in which rational actors calculate the optimal allocation of resources between compliance with collective obligations and their enforcement i relax these forward looking behavioral assumptions and show how social control might evolve among backward looking pragmatists computers simulations test the ability of various sanctioning regimes to generate cooperation as well as resist stampedes that risk overcooperation and needless sacrifice external moral sanctions produce too little cooperation while internalized sanctions produce too much

does the nonfarm economy offer pathways for upward mobility evidence from a panel data study in ethiopia summary empirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households wealth or income this paper explores whether nonfarm employment leads to higher consumption expenditure growth in ethiopia we find that 1 households consumption expenditure growth is positively correlated with the initial share of nonfarm income 2 the growth elasticity of nonfarm income share is higher for wealthier households and 3 the main source of growth for nonfarm participants comes from the higher rates of return participants enjoy on their human and physical capital

the emergence of generalized exchange the existence of generalized exchange characterized by unilateral resource giving has been a puzzle when we assume rational actors because free riding can occur this article first identifies pure generalized exchange in which each actor gives resources to the recipient s of his choice then it proposes the fairness based selective giving strategy an actor adopting this strategy selects a recipient whose behaviors satisfy her criterion of fairness provided perfect information is given the results of evolutionary simulation show that pure generalized exchange can emerge among egoists without collective norms even in societies in which individuals have information only about their immediate neighbors

a bio economic analysis of the benefits of conservation agriculture the case of smallholder farmers in adami tulu district ethiopia this study analyses the potential impact of conservation agriculture ca and its binding constraints for adoption in smallholder farming systems in a drought prone district of central ethiopia we develop a dynamic household bio economic model by taking into account the existing farming system resource constraints and market imperfections climate induced production risk is introduced into the model by estimating a weather specific production function using data generated from a crop simulation model it is found that the full package of ca which consists of minimum tillage mulching and crop diversification does not appear to be in the best interest of smallholder farmers however loosely defined ca practises such as sole maize production with conservation tillage and maize bean intercropping with conventional tillage which are not currently practised in the study area are likely to be adopted by the farmers the results further demonstrate that time preference risk aversion limited credit and market access are key constraints to ca uptake however merely addressing these constraints may be insufficient incentives for smallholder farmers to fully adopt ca practises it is important to identify conditions under which the full package ca can be effectively adopted before it is widely promoted

monetary policy under alternative bank market structures abstract the purpose of this paper is to derive and compare the short run effects of monetary policy under both perfectly and imperfectly competitive banking markets within the context of a general equilibrium framework which emphasizes the demands for and supplies of financial assets it is demonstrated that the structure of banking markets can have a bearing on the appropriate choice of policy targets and instruments specifically the federal funds rate is shown to be a potentially ineffective target instrument for policy under a competitive banking system although it can be used to produce conventional short run effects when banking markets are imperfect in contrast the level of currency and unborrowed reserves can be utilized as an effective target instrument under either form of bank market structure

resource degradation low agricultural productivity and poverty in sub saharan africa pathways out of the spiral sub saharan africa ssa has the lowest agricultural productivity in the world while almost half of the population lives below us 1 per day the biggest development policy challenge is to find appropriate solutions to end hunger and poverty in the region building on several years of empirical research conducted in east africa this paper identifies potential strategies for sustainable development in this region in general the empirical evidence reviewed confirms that different strategies are needed in different development domains of ssa nevertheless some elements will be common to all successful strategies including assurance of peace and security a stable macroeconomic environment provision of incentives through markets where markets function development of market institutions where they do not and public and private investment in an appropriate mix of physical human natural and social capital the differences in strategies across these domains mainly reflect differences in the mix of those investments as influenced by different comparative advantages

comments on arrow and on lucas such a number of interesting and provocative things are put forward in lucas and in arrow in this issue that i would like to be able to dissect them in detail for example lucas states that the problem of controlling inflation has been successfully solved in a scientific sense p s405 i am tempted to explore the limits of the set of problems that might be said to be scientifically solved in the lucas sense but i fear that this would take up a good deal of space arrow deplores the use of homogeneity assumptions as a device for adding content to otherwise inconclusive economic theories but presumably he does not believe that the sonnenschien mantel debreu theorem is the ultimate conclusion regarding the useful content of the propositions of general equilibrium theory some restrictions of intermediate strength are presumably called for and i would like to make the case that strong empirical generalizations about the nature of human actors such as those describing the biological requirements for survival are available and relevant in this connection this too would take some space to develop in detail though not as much as the first subject given the constraints i must choose a focus i will focus on what i take to be the main message that lucas has put forward regarding the relationship between adaptive behavior and the rationality assumptions employed in standard economic theory this message is recognizable as the intellectual descendant of similar discussions by friedman and machlup in the 1940s and 1950s and the ideas involved remain extremely influential in the discipline today i will present and comment on my own statement of this position which i following blaug 1980 will call the classic defense of the rationality as

unorganized loan markets and monetary policy instruments abstract the paper uses a portfolio balance model to examine the relationship between monetary policy instruments and the unorganized loan rate predicting the direction of the change in this rate as a result of varying a policy instrument is important since this rate is one channel through which a change in a policy instrument transmits to real activity and since the demand side of the money market is partially re equilibrated through this change studies have not clearly emphasized the relationship between each of the policy instruments and this rate the findings depart in some cases from existing studies and shed more light on the relationships among policy instruments monetary aggregates and real activity

non farm work and food security among farm households in northern ghana this paper examines the impact of non farm work on household income and food security among farm households in the northern region of ghana we analyze the impact by employing propensity score matching method that accounts for self selection bias the matching results show that participation in non farm work exerts a positive and statistically significant effect on household income and food security status supporting the widely held view that income from non farm work is crucial to food security and poverty alleviation in rural areas of developing countries

learning to cooperate stochastic and tacit collusion in social exchange the prisoner s dilemma formalizes the social trap that arises when individually rational choices aggregate with mutually undesirable consequences the game theoretic solution centers on the opportunity for tacit collusion in repeated play however not all actors grasp the strategic implications of future interaction accordingly this study reformulates the game as a stochastic learning model in which the behavior of interdependent actors is constinually shaped by sanctions and cues generated by their interaction computer simulations of a two person game show that adaptive actors are led into a social trap more readily than are fully rational actors but they are also better at finding their way out prosocial norms appear to be a consequence rather than cause of cooperation but useful in promoting forgiveness of random deviance the model is then elaborated as an n way prisoner s dilemma simulations show how the effects of network size density mobility and anonymity derive from a fundamental princi

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

exit voice dynamics in collective action an analysis of emigration and protest in the east german revolution1 what triggers protest in a highly repressive regime do opportunities to exit an unfavorable regime through flight spur collective action aimed to reform or replace it drawing on hirschman s microeconomic theory of exit and voice as responses to organizational decline this article offers a sociological theory of exit voice dynamics that considers the implications of social embeddedness for collective action a unique data set on migration and protest in the east german revolution of 1989 90 is used to analyze county level variations in exit and voice alongside indicators of political loyalty social movement organization and social and economic conditions the analysis finds strong support for the reformulated exit voice model and its prediction of an inverted documentclass aastex usepackage amsbsy usepackage amsfonts usepackage amssymb usepackage bm usepackage mathrsfs usepackage pifont usepackage stmaryrd usepackage textcomp usepackage portland xspace usepackage amsmath amsxtra

chains of cooperation threshold effects in collective action granovetter s threshold model of collective action shows how each new participant triggers others until the chain reaction reaches a gap in the distribution of thresholds hence outcomes depend on the network of social ties that channel the chain reactions however structural analysis is encumbered by the assumption that thresholds derive from changing marginal returns on investments in public goods a learning theoretic specification imposes less stringent assumptions about the rationality of the actors and is much better suited to a structural analysis computer simulations suggest that threshold effects may be the key to solving the coordination problem when individual choices are contingent on participation by others this interdependence facilitates the coordination of contributions needed to shift the bistable system from a noncooperative equilibrium to a cooperative one further simulations with low density networks show that these chain reactions require bridges that link socially distant actors supporting granovetter s case for the strength of weak ties

wealth risk and activity choice cattle in western tanzania abstract imperfect credit markets force households to use their savings for investment profitable activities often require lumpy investments limiting entry by poorer households resulting in increasing welfare differences in tanzania cattle are a profitable but lumpy investment and a liquid asset for consumption smoothing richer households own substantial cattle herds while poorer households specialize in low return low risk activities a dynamic programming model and simulations are presented to analyze entry into asset accumulation under income risk the evidence suggests that households with lower endowments are less likely to own cattle and returns to their endowments are lower

effect of off farm income on smallholder commercialization panel evidence from rural households in ethiopia this article investigates how off farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in ethiopia a double hurdle model is estimated using three waves of panel data from the ethiopian rural household survey unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach the results show that off farm income has no significant influence on household crop output market participation however conditional on market participation additional off farm earnings negatively affect the marketed surplus this indicates that farmers use off farm earnings for consumption rather than for investment in agricultural production policy measures that promote rural investment may help increase returns to labor for land poor households participating in off farm work in the process of agricultural commercialization

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

the paradox of group size in collective action a theory of the critical mass ii many sociologists incorrectly believe that larger groups are less likely to support collective action than smaller ones the effect of group size infact depends on costs if the costs of collective goods rise with the number who share in them larger groups act less frequently than smaller ones if the costs vary little with group size larger groups should exhibit more collective action than smaller ones because larger groups have more resources and are more likely to have a critical mass of highly interested and resourceful actors the positive effects of group size increase with group heterogeneity and nonrandom social ties paradoxically when groups are hetero geneous fewer contributors may be needed to provide a good to larger groups making collective action less complex and less expensive

poverty livelihood and class in rural south africa abstract using data from a national living standards survey undertaken in late 1993 this paper disaggregates and explores the economics of livelihood generation and class in rural south africa in an effort to contribute to the ongoing and vociferous debate in south africa about poverty and its alleviation pursuant to the suggestion of participants in a recent participatory poverty assessment this paper analyzes what might be termed the class structure of poverty after exploring the range of claiming systems and livelihood tactics available in rural south africa the paper offers a first look at who the poor are by disaggregating the rural population into discrete livelihood strategy classes non parametric regression methods are used to then estimate and graphically explore the nature of the livelihood mapping between endowments and real incomes in addition to identifying those endowment combinations that map to consumption levels below the poverty line the asset basis of poverty the topography of the estimated livelihood mapping helps identify the constraints that limit household s ability to effectively utilize their assets and endowments these results suggest that poverty is a matter of not only having few assets but also of constraints which limit the effectiveness with which those assets are used and poverty and livelihood policy needs to be designed accordingly

rationality of self and others in an economic system in this paper i want to disentangle some of the senses in which the hypothesis of rationality is used in economic theory in particular i want to stress that rationality is not a property of the individual alone although it is usually presented that way rather it gathers not only its force but also its very meaning from the social context in which it is embedded it is most plausible under very ideal conditions when these conditions cease to hold the rationality assumptions become strained and possibly even self contradictory they certainly imply an ability at information processing and calculation that is far beyond the feasible and that cannot well be justified as the result of learning and adaptation let me dismiss a point of view that is perhaps not always articulated but seems implicit in many writings it seems to be asserted that a theory of the economy must be based on rationality as a matter of principle otherwise there can be no theory this position has even been maintained by some who accept that economic behavior is not completely rational john stuart mill 1909 bk 2 ch 4 argued that custom not competition governs much of the economic world but he adds that the only possible theory is that standard economic doctrine makes assumptions of rationality that have very strong implications for the complexity of individuals decision processes the most complete assumptions of competitive general equilibrium theory require that all future and contingent prices exist and be known in fact of course not all these markets exist the incompleteness of markets has several side consequences for rationality for one thing each decision maker has to have a model that predicts the future spot prices this is an informational burden of an entirely different magnitude than simply optimizing at known prices it involves all the complexity of rational analysis of data and contradicts the much praised informational economy of the price system it is also the case that equilibria become much less well defined similar problems occur with imperfect competition this research was supported by the office of naval research grant onr n00014 79 c 0685 at the center for research in organizational efficiency institute for mathematical studies in the social sciences stanford university stanford california

social networks and collective action a theory of the critical mass iii most analyses of collective action agree that overcoming the freerider problem requires organizing potential contributors thus making their decisions interdependent the potential for organizing depends on the social ties in the group particularly on the overall density or frequency of ties on the extent to which they are centralized in a few individuals and on the costs of communicating and coordinating actions through these ties mathematical analysis and computer simulations extend a formal microsocial theory of interdependent collective action to treat social networks and organization costs as expected the overall density of social ties in a group improves its prospects for collective action more significant because less expected are the findings that show that the centralization of network ties always has a positive effect on collective action and that the negative effect of costs on collective action declines as the group s resource or interest heterogeneity increases these nonobvious resu

avoiding complexity catastrophe in coevolutionary pockets strategies for rugged landscapes can firms and coevolutionary groups suffer from too much interdependent complexity is complexity theory an alternative explanation to competitive selection for the emergent order apparent in coevolutionary industry groups the biologist stewart kauffman suggests a theory of complexity catastrophe offering universal principles explaining phenomena normally attributed to darwinian natural selection theory kauffman s complexity theory seems to apply equally well to firms in coevolutionary pockets based on complexity theory four kinds of complexity are identified kauffman s nk c model is positioned at the edge of chaos between complexity driven by newtonian simple rules and rule driven deterministic chaos kauffman s insight which is the basis of the findings in this paper is that complexity is both a consequence and a cause multicoevolutionary complexity in firms is defined by moving natural selection processes inside firms and down to a parts level of analysis in this instance porter s value chain level to focus on microstate activities by agents the assumptions of stochastically idiosyncratic microstates and coevolution in firms are analyzed competitive advantage as a dependent variable is defined in terms of nash equilibrium fitness levels this allows a translation of kauffman s theory to firms paying particular attention to 1 how value chain landscapes might be modeled 2 assumptions underlying kauffman s models making them amenable to firms and 3 a delineation of seven of kauffman s computational experiments as part of the translation possible parallels between the application of complexity catastrophe theory to coevolutionary pockets and studies by institutional theorists and social network analysts are discussed the models derive from spin glass microstate models resulting in boolean games kauffman s boolean statistical mechanics is introduced in developing the logic underlying the somewhat simplified nkm c model the model allows the use of computational experiments to better understand how the dependent variable value chain fitness is affected by changes in the number of internal interdependencies k the number of coevolutionary links with opponents c the size of the coevolutionary pocket s and the number of simultaneous adaptive changes among other things various computational experiments are presented that suggest strategic organizing approaches most likely to foster competitive advantage high or low nash equilibrium fitness levels are shown to result from internal and external coevolutionary densities as a function of links among value chain competencies within a firm and between a firm and an opponent complexity phenomena appear to suggest a number of expected and thus validating and surprising strategies with respect to complex organizational interdependencies for example moderate complexity fares best and external coevolutionary complexity sets an upper bound to advantages likely to be gained from internal complexity various complexity lessons are discussed models such as the nk c could offer insights into strategic organizing

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

nonfarm employment agricultural intensification and productivity change empirical findings from uganda this article uses panel data from the living standards measurement study integrated surveys on agriculture for uganda to assess the farm level effects of nonfarm employment on agricultural intensification and productivity change a sample selection model is used to account for both unobserved heterogeneity and potential simultaneity between agricultural production and nonfarm income results show that nonfarm employment can have differential impacts on farm technology intensity and productivity nonfarm income is found to have a positive impact on farm hired labor and improved seed intensity a negative effect on on farm family labor use and no significant impact on fertilizer soil water management and joint use of farm technologies the econometric evidence also indicates that agricultural productivity declines as nonfarm income increases taken together our findings reveal important trade offs between nonfarm employment and income and farm productivity growth under smallholder agriculture the results indicated that targeted policies are required to reduce these potential trade offs between nonfarm employment and agricultural intensification and productivity change

competitive interest payments on bank deposits and the long run demand for money reply this paper tests two assumptions made in previous demand for money studies the first assumption concerns the role assigned to the interest rate in the demand for money function common practice identifies the rate of interest with the opportunity cost of holding money in section i this formulation is shown to blur an important distinction between the price of money and the price of money substitutes and to implicitly assume that the relevant price variable is the difference between these two distinct prices a second assumption is that the current ban on interest payments on demand deposits is fully effective in section ii i operationally define these price variables and estimate perfectly competitive interest payments on commercial bank deposits this is done by crudely measuring commercial bank marginal costs and assuming that all excess profit is passed on to depositors in indirect ways section iii presents estimates of a more complete longrun demand for money relationship which explicitly includes an own price and a cross price as separate influences and assumes that the prohibition of the payment of interest on deposits is totally ineffective although no firm conclusion is reached concerning the proper functional specification of the demand function the results significantly improve upon previous demand for money estimates which assumed that the interest payment prohibition is totally effective in section iv the results are summarized and implications of the analysis for monetary theory are presented my competitive demand for money formulation leads to a reinterpretation of the existing evidence on what is generally referred to as the interest elasticity of demand for money this estimate is shown to be significantly biased downward it also implies that the demand for and supply of money are more interdependent than is usually assumed

synergy and learning effects of informal labor sharing arrangements summary we study the effects of informal labor sharing arrangements and other social interactions on farmers productivity in a developing country context testing whether these types of social and work interactions lead to productivity gains through learning synergy or both using a rich panel data set of ethiopian subsistence farmers we estimate a distance function of grains production and find large productivity gains approximately 33 and 29 in 1999 and 2004 from labor sharing due to synergy effects that boost labor productivity however labor sharing does not lead to learning as the productivity gains observed in years with labor sharing disappear in following years if the farmers do not continue to engage in labor sharing labor sharing partners are either neighbors relatives members of the same funeral and religious associations or have plots next to each other which together reduce labor sharing as a single venue for learning however the synergy effect is strong enough to warrant the design of extension and outreach policies that recognize and utilize farmers informal social networks such as labor sharing arrangements

a behavioral model of turnout the so called paradox of voting is a major anomaly for rational choice theories of elections if voting is costly and citizens are rational then in large electrorates the expected turnout would be small for if many people voted the chance of anyone being pivotal would be too small to make the act worthwhile yet many people do vote even in large national elections to address this puzzle we construct a model of adaptive rationality citizens learn by simple trial and error repeating satisfactory actions and avoiding unsatisfactory ones their aspiration levels which code current payoffs as satisfactory or unsatisfactory are also endogenous themselves adjusting to experience our main result is that agents who adapt in this manner turn out in substantial numbers even in large electorates and even if voting is costly for everyone standard conceptions of rational behavior do not explain why anyone bothers to vote in a mass election turnout is the paradox that ate rational choice theory fiorina 1990 334 we would like to thank stephen ansolabehere sorin antohi glenn ellison dedre gentner sunil kumar david laitin tze lai arthur lupia elijah millgram lincoln moses scott page tom palfrey john patty paul pfleiderer adam simon joel sobel carole uhlaner three anonymous referees and the participants in the political economics seminar at the gsb the stanford caltech workshop the unc american politics research group the ucla conference on cognition emotion and rational choice panels at the annual meetings of the mpsa and the apsa the agent 2000 workshop the seventh annual wallis conference the cmu pitt colloquium series and the center for advanced study in the behavioral sciences seminar series for their helpful comments this paper was written while ting was at the university of north carolina at chapel hill and he thanks unc s department of political science for its support it was revised while bendor was a fellow at the casbs and he is grateful for the center s financial and intellectual support

farm productivity in rwanda effects of farm size erosion and soil conservation investments this paper examines the effects of farm size soil erosion and soil conservation investments on land and labor productivity and allocative efficiency in rwanda there were several key results first there is a strong inverse relationship between farm size and land productivity and the opposite for labor productivity for smaller farms there is evidence of allocative inefficiency in use of land and labor probably due to factor market access constraints second farms with greater investment in soil conservation have much better land productivity than average those with very eroded soils do much worse than average smaller farms are not more eroded than larger farms but have twice the soil conservation investments third land productivity benefits substantially from perennial cash crops and the gains to shifting to cash crops are highest for those with low erosion and high use of fertilizer and organic matter program and policy effort to encourage and enable farmers to make soil conservation investments to use fertilizer and organic matter and to participate in cash cropping of perennials will have big payoffs in productivity land markets that allow smaller farmers to buy land could also increase aggregate productivity

forests livelihoods and conservation broadening the empirical base summary more than 10 000 years after the agricultural revolution started millions of rural smallholders across the developing world may still derive as much income from foraging forests and wildlands as from cultivating crops these steady environmental income flows come often from public forests and are extracted by men and women alike however inflexible supplies from nature the physical hardship of harvesting and commonly low returns limit their role as safety nets and pathways out of poverty while their harvesting does not preclude the ongoing conversion of wildlands to agriculture privileged access to high quality environmental resources can become a strong local conservation motive

monetary policy in a model with a federal funds market fixed versus flexible deposit rates this paper examines the comparative static effects of various monetary policy instruments under the assumption of a market determined interest rate on demand deposits and alternatively for the case of an exogenously fixed demand deposit rate in both cases monetary policy effects are analyzed where the monetary policy operating target is either the federal funds rate or a reserve aggregate the aim of the paper is to assess the differences in monetary policy effects for each operating procedure between the flexible and fixed deposit rate cases we extend previous analyses of this subject by incorporating an explicit federal funds market in our model and providing a detailed analysis of monetary policy with a federal funds rate operating target with both a flexible and a fixed deposit rate additionally we consider the differences in the role of secondary monetary policy instruments such as the discount rate and the required reserve ratio in the different regimes finally the paper considers the implications of flexibility of the deposit rate for the feasibility of the current monetary policy strategy of using a short run operating target either the federal funds rate or a reserve aggregate to attain target

income diversification and entry barriers evidence from the tigray region of northern ethiopia abstract farm households diversify their income sources into off farm wage employment motivated by low farm income and availability of surplus family labor whereas they enter into off farm self employment to earn an attractive return farm households have upward sloping although inelastic off farm labor supply curves therefore increasing the availability of off farm activities and improving the wage rate received by farm households can expand the economic activity of the tigray regional state due to entry barriers relatively wealthy farm households may dominate the most lucrative rural non farm activities such as masonry carpentry and petty trade hence the underlying factors that hinder participation in non farm activities such as credit constraints and lack of skill may have to be addressed through the provision of credit and technical training for the poor

improving the efficiency targeting of malawi s farm input subsidy programme big pain small gain abstract the farm input subsidy programme fisp in malawi was introduced in the 2005 2006 season against a background of bad weather affecting production and prolonged food shortages vouchers are distributed empowering eligible farmers to exchange them for fixed quantities of inputs at subsidized prices since its inception there has been a debate at national level about whether the fisp s potential has been fully exploited with policy makers exploring options to improve the programme proposals include targeting efficient and productive farmers to maximize returns in this paper we evaluate the effectiveness of these proposed changes to the existing fisp design by utilizing two waves of the lsms isa survey merged with climatic data we estimate how the national demand for agricultural inputs varies according to a variation in the targeting criteria by means of a two stage demand system then we identify more efficient farmers by means of a stochastic frontier approach we observe a mismatch between voucher recipients and efficiency with approximately 60 of vouchers being allocated to the three bottom quintiles of efficiency this mismatch is observed also at the spatial level with more vouchers going to districts characterized by less efficient production while concerns on the distributional impacts of the new criteria are discussed together with some suggestions for spatially diversifying the structuring of the policy and incentivizing crop diversification our results highlight a high substitutability of commercial with subsidized inputs by new eligible farmers consequently simulating the targeting policy variation we obtain an outcome that would lead only to a limited increases in predicted food expenditure ranging from 0 27 to 0 8 and maize production from 0 2 to 1 3 scope for analysing different adjustments in the functioning of fisp are thus proposed to policy makers

when does one bad apple spoil the barrel an evolutionary analysis of collective action this paper studies collective action games in which the production of a public good requires teamwork a leading example is a threshold game in which provision requires the voluntary participation of m out of n players quantal response strategy revisions allow play to move between equilibria in which a team successfully provides and an equilibrium in which the collective action fails a full characterization of long run play reveals the determinants of success these include the correlation between players costs of provision and their valuations for the good the addition of an extra bad apple player can spoil the barrel by destabilizing successful teams and so offers a rationale for limiting the pool of possible contributors copyright 2008 wiley blackwell

does nonagricultural labor relax farmers credit constraints evidence from longitudinal data for vietnam we examine the relationship between participation in nonagricultural labor activities and farming production decisions focusing on the use of inputs using longitudinal data for vietnam from 1993 to 1998 we find that households engaged in nonagricultural labor spend significantly more on seeds services hired labor and livestock inputs this is consistent with the hypothesis that nonagricultural labor income relaxes credit constraints to farming

deregulation and oligopolistic rivalry in bank deposit markets abstract this paper provides a partial equilibrium analysis of a deregulated market for bank deposits in which banks behave oligopolistically but entry and exit are freely permitted it is demonstrated that the effects of variations in market interest rates reserve requirements and bank cost and demand conditions upon the market quantity of bank deposit money are fundamentally altered if the degree of bank rivalry adjusts endogenously hence banking deregulation may produce significant changes in the relationships between these variables and the stock of deposit money

fishing and nonfishing income decisions the role of human capital and family structure resource dependent households often diversify their income we model demand for remittances and supply of off resource labor as a joint decision and discuss household trade offs we extend the off farm labor supply literature to a rural fishery contrasting our results to common findings in the farm literature and providing empirical evidence of the interdependence between education and family structure in determining income diversification using a unique dataset from malaysia we find that more educated households are less likely to diversify their income with caveats depending on family composition policy implications for resource management in a remittance economy with alternative livelihoods are discussed

the relation between farm size and farm productivity the role of family labor supervision and credit constraints abstract the paper shows that if the performance of hired farmhands is affected by supervision from family members and if the availability of credit is dependent on the amount of land owned then a systematic positive or negative relationship between per acre yields and farm size will prevail a model with no supervision effects on labor productivity would predict that yields are unaffected by farm size the paper also investigates the relation between land utilization and owned holding size when land rental possibilities are limited results are shown to be compatible with various observed patterns in ldcs