Promoting the Kenyan Potato Value Chain: Can Contract Farming Help Build Trust and Reduce Transaction Risks?

African economies are increasingly confronted with changing food and commodity markets, due to globalisation, economic liberalisation and urbanisation. Subsequently, consumer preferences change. This poses new opportunities but also challenges to small-scale producers, traders and processors along agricultural value chains. The value chain is increasingly seen as an important development framework, with contract farming being viewed as an instrument for improving value chain performance by reducing transaction costs and risks and by building trust in vertical cooperation. This paper uses the case study of the potato value chain in Kenya to examine these assumptions. It is shown that contract farming can be used to reduce transaction costs and risks, and to improve the organisation and governance of value chains by creating stable business relationships. Nevertheless, it is constrained by a number of market and institutional failures.agricultural value chains, contract farming, potato marketing, Kenya, Agribusiness, Marketing,

Greed and grievance in civil war

The authors compare two contrasting motivations for rebellion: greed and grievance. Most rebellions are ostensibly in pursuit of a cause, supported by a narrative of grievance. But since grievance assuagement through rebellion is a public good that a government will not supply, economists predict such rebellions would be rare. Empirically, many rebellions appear to be linked to the capture of resources (such as diamonds in Angola, and Sierra Leone, drugs in Colombia, and timber in Cambodia). The authors set up a simple rational choice model of greed-rebellion, and contrasts its predictions with those of a simple grievance model. Some countries return to conflict repeatedly. Are they conflict-prone, or is there a feedback effect whereby conflict generates grievance, which in turn generates further conflict? The authors show why such a feedback effect might be present in both greed-motivated and grievance rebellions. The authors'results contrast with conventional beliefs, about the causes of conflict. A stylized version of conventional beliefs would be that grievance begets conflict, which begets grievance, which begets further conflict. With such a model, the only point at which to intervene is to reduce the level of objective grievance. The authors'model suggests that what actually happens is that opportunities for predation (controlling primary commodity exports) cause conflict, and the grievances this generates induce diasporas to finance further conflict. The point of policy intervention here is to reduce the absolute, and relative attraction of primary commodity predation, and to reduce the ability of diasporas to fund rebel movements.Environmental Economics&Policies,Peace&Peacekeeping,Services&Transfers to Poor,Labor Policies,Economic Theory&Research,Social Conflict and Violence,Peace&Peacekeeping,Safety Nets and Transfers,Rural Poverty Reduction,Services&Transfers to Poor

Murder by Numbers: Socio-Economic Determinants of Homicide and Civil War

Deliberate killing is a common part of the defining features of both homicide and civil war. Often, the scale of killing is also similar: most countries have homicide rates that exceed the threshold of one thousand combat-related deaths during a year that is the standard criterion for civil war. What is clearly different is the organization of killing: the perpetrators of homicide are usually individuals or small groups, whereas rebellion – the direct cause of a civil war - requires a cohesive group of at least several hundred killers. Beyond this, the motivation for the two types of killing may differ systematically, although evidently both homicide and rebellion have many different motivations, including error and irrationality. In this paper we investigate whether the socio-economic determinants of homicide and civil war are similar, and then explore potential inter-relationships between them. We compare our existing model of the risk of civil war with a new model of the homicide rate. We find that there is a ‘family resemblance’ between the two types of killing, but surprising differences. Furthermore, we turn to the inter-relationships between homicide and the risk of civil war. Specifically, we ask whether a high rate of homicide makes a country more prone to civil war, and whether a civil war makes a country more prone to homicide. Our results indicate that higher homicide rate do not increase the risk of war but that civil wars generate a legacy of increased post-conflict homicide rates.

Democracy’s Achilles Heel or, How to Win an Election without Really Trying

In this paper we investigate the efficacy of illicit electoral tactics and the characteristics which make a society prone to such tactics. We first investigate the chances of an incumbent head of government winning an election. We find that in those elections in which illicit tactics were prevalent the chances of incumbent victory increase substantially, more than doubling the expected duration in office. Further, illicit tactics sharply reduce the importance of good economic performance for survival in office. We then investigate what makes a society prone to illicit electoral tactics. Both structural conditions and institutions matter. Societies that are small, low-income, and resource-rich have little chance of a clean election unless these conditions are offset by checks and balances such as veto points and a free press. Aid has offsetting effects, the net effect being modest. We show that these results are robust to different measures of the conduct of elections and to fixed effects. Finally, we revisit the Jones-Olken result that individual leaders matter for economic performance and find that it holds only where leaders are not disciplined by well-conducted elections.

Military Expenditure in Post-Conflict Societies

Post-conflict situations face a high risk of reversion to conflict. We investigate the effect of military expenditure by the government during the first decade post-conflict on the risk of reversion. We contrast two theories as to the likely effects. In one, military spending deters conflict by reducing the prospects of rebel success. In the other it acts as a signal to the rebels of government intentions. In the signalling model, low military spending signals that the government intends to adhere to the terms of the peace settlement and so reduces the risk of renewed rebellion. We investigate the effects of post-conflict military spending on the risk of conflict, using our existing models of military expenditure and of conflict risk. We find that, consistent with the signalling model, high military spending post-conflict significantly increases the risk of renewed conflict. This effect of military spending is distinctive to post-conflict period, and becomes progressively more pronounced over the decade.