The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia

Strategic interaction between public and private actors is increasingly recognised as an important determinant of agricultural market performance in Africa and elsewhere. Trust and consultation tends to positively affect private activity while uncertainty of government behaviour impedes it. This pap...

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Main Authors:	Abbink, Klaus, Jayne, Thomas S., Moller, Lars C.
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Marketing M310 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Agricultural Markets and Marketing Cooperatives Agribusiness Q130 Agricultural Policy Food Policy Q180
Online Access:	http://hdl.handle.net/10986/5310

id	okr-10986-5310
recordtype	oai_dc
spelling	okr-10986-53102021-04-23T14:02:21Z The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia Abbink, Klaus Jayne, Thomas S. Moller, Lars C. Marketing M310 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Agricultural Markets and Marketing Cooperatives Agribusiness Q130 Agricultural Policy Food Policy Q180 Strategic interaction between public and private actors is increasingly recognised as an important determinant of agricultural market performance in Africa and elsewhere. Trust and consultation tends to positively affect private activity while uncertainty of government behaviour impedes it. This paper reports on a laboratory experiment based on a stylised 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. 2012-03-30T07:32:14Z 2012-03-30T07:32:14Z 2011 Journal Article Journal of Development Studies 00220388 http://hdl.handle.net/10986/5310 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Zambia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Marketing M310 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Agricultural Markets and Marketing Cooperatives Agribusiness Q130 Agricultural Policy Food Policy Q180
spellingShingle	Marketing M310 Economic Development: Agriculture Natural Resources Energy Environment Other Primary Products O130 Formal and Informal Sectors Shadow Economy Institutional Arrangements O170 Agricultural Markets and Marketing Cooperatives Agribusiness Q130 Agricultural Policy Food Policy Q180 Abbink, Klaus Jayne, Thomas S. Moller, Lars C. The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia
geographic_facet	Zambia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Strategic interaction between public and private actors is increasingly recognised as an important determinant of agricultural market performance in Africa and elsewhere. Trust and consultation tends to positively affect private activity while uncertainty of government behaviour impedes it. This paper reports on a laboratory experiment based on a stylised 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.
format	Journal Article
author	Abbink, Klaus Jayne, Thomas S. Moller, Lars C.
author_facet	Abbink, Klaus Jayne, Thomas S. Moller, Lars C.
author_sort	Abbink, Klaus
title	The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia
title_short	The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia
title_full	The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia
title_fullStr	The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia
title_full_unstemmed	The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia
title_sort	relevance of a rules-based maize marketing policy: an experimental case study of zambia
publishDate	2012
url	http://hdl.handle.net/10986/5310
_version_	1764394616557142016

The Relevance of a Rules-Based Maize Marketing Policy: An Experimental Case Study of Zambia

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