The relevance of a rules-based maize marketing policy
Subtitle: an experimental case study of Zambia
By: Klaus Abbink, Thomas S. Jayne, Lars C. Moller.
Contributors: Jayne, Thomas S.; Møller, Lars.; World Bank.
Series: Policy research working paper -- 4727; Policy research working papers (Online) -- 4727.
Publisher: World Bank
Published: 2008
Place of publication: [Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Corn -- Zambia -- Marketing
Description: "Strategic interaction between public and private actors is increasingly recognized as an important determinant of agricultural market performance in Africa and elsewhere.  Trust and consultation tend to positively affect private activity while uncertainty of government behavior impedes it.  This paper reports on a laboratory experiment based on a stylized model of the Zambian maize market.  The experiment facilitates a comparison between discretionary interventionism and a rules-based policy in which the government pre-commits itself to a future course of action.  A simple precommitment rule can, in theory, overcome the prevailing strategic dilemma by encouraging private sector participation.  Although this result is also borne out in the economic experiment, the improvement in private sector activity is surprisingly small and not statistically significant due to irrationally cautious choices by experimental governments.  Encouragingly, a rules-based policy promotes a much more stable market outcome, thereby substantially reducing the risk of severe food shortages.  These results underscore the importance of predictable and transparent rules for the state's involvement in agricultural markets. "--World Bank web site.
Notes: Title from PDF file as viewed on 5/18/2009.

Includes bibliographical references.

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Mode of access: World Wide Web.