Production frontiers and efficiency measures : concepts and applications

Two major criticisms have been levelled against the statistical approach to measuring production efficiencies. First, the sampling distributional assumptions artificially imposed on the one sided-error term used to characterize inefficiency are somewhat restrictive. Moreover, alternative distributional assumptions can lead to substantially different results for the estimated technical efficiencies; making it difficult to provide an economic and practical justification of the choice of a particular distribution. Within the spectrum of inefficiency sampling distributions proposed in the literature, the half- or truncated normal has received a relatively wider applications than others such as gamma and exponential. Quite often the choice of the distributions is based on ease of empirical estimation. Second, the specification of the stochastic frontier production function in the statistical approach assumes that the effects of technical inefficiency on input productivity (or elasticity) are the same for each input with the resultant neutral shift of the frontier production function from the ‘average’ and firm-specific realized production functions. In other words, the frontier and the other production functions have identical slope coefficients (input elasticities) but different intercepts so that they merely represent neutral shifts from one another. While some attempts have been made recently in response to the first criticism, the second one appears to have so far attracted very little attention in the production frontier and efficiency literature. Thus the primary objective of this thesis is to develop an alternative conceptual framework to production efficiency measurement that aims at obviating both of these criticisms. Empirical illustrations based on survey agricultural data sets from Sri Lanka, China and India are provided to show the workability of the proposed procedures. The thesis format is as follows. Chapter 1 gives an overview of production efficiency analysis with more emphasis on technical efficiency measurement. Chapter 2 establishes for subsequent applications, the modelling, estimation and testing procedures of linear models with heterogeneity in both intercepts and slopes. Chapter 3 discusses and empirically demonstrates a method of measuring firm- and input-specific technical efficiency within a varying coefficients production function framework. Chapter 4 extends this method to a panel data context and discusses the measurement of temporal firm-specific technical efficiency and shifts over time of the frontier production functions (that is, technological progress). Chapter 5 focusses on total factor productivity growth over time. It explains a method to decompose the sources of total factor productivity growth into technological progress and changes in technical efficiency within the framework of the varying coefficients frontier production function approach discussed in the preceding chapters. In chapter 6, a primal method based on a varying coefficients production function is developed for estimating allocative efficiency. An empirical illustration is provided. The concluding chapter highlights some of the issues not explicitly addressed in the concluding final section of each chapter and also points out some of the problems, mainly of empirical nature, that may be encountered. Some directions for further investigations are briefly suggested

The evolution of industry in Uganda

The paper looks at the evolution of industry in Uganda examining drivers and constraints since the pre-colonial period in the 1940s to date. It is argued that the state played a central role in industrialization during the pre-colonial and immediate post-colonial period. The paper further looks at industrialisation during the liberal phase. The current structure, size and distribution of industry are discussed in light of the laissez fair paradigm. The non-direct interventionist policy to industrialization has not been adequate to propel industrial development in Uganda. State withdrawal from direct involvement in industrial development was prematurely done and should be revisite

Illicit Trade in East Africa: What Do We Really Know?

This paper documents the typology, forms, scope, origin and magnitudes, driver and impact of illicit trade in East Africa, with particular reference to Uganda. It finds evidence of unprecedented flow of counterfeit trade - suggesting concerted cross-border effort, including greater harmonization taxes and border procedures

Illicit Trade in East Africa: What Do We Really Know?

This paper documents the typology, forms, scope, origin and magnitudes, driver and impact of illicit trade in East Africa, with particular reference to Uganda. It finds evidence of unprecedented flow of counterfeit trade - suggesting concerted cross-border effort, including greater harmonization taxes and border procedures

Tax Reforms and Domestic Revenue Mobilization in Uganda

This paper explores the options available for policy-makers on revenue mobilization in Uganda and tackles fundamental policy questions about what measures could result into fast revenue growth for Uganda, focusing on the tax reforms and macroeconomic issues. The elasticity and buoyancy indexes computed for the pre- and post-reform periods as well as for the combined period constitute a framework through which the impact of the reforms on each index between the two periods can be discerned. The approach provides the basis for identifying the sources of fast revenue growth and/or lagging revenue growth in the tax system, and the components of revenue growth which are within or outside the control of authorities. This paper offers practical lessons for Uganda and other African countries attempting to achieve their revenue targets

Tax Reforms and Domestic Revenue Mobilization in Uganda

This paper explores the options available for policy-makers on revenue mobilization in Uganda and tackles fundamental policy questions about what measures could result into fast revenue growth for Uganda, focusing on the tax reforms and macroeconomic issues. The elasticity and buoyancy indexes computed for the pre- and post-reform periods as well as for the combined period constitute a framework through which the impact of the reforms on each index between the two periods can be discerned. The approach provides the basis for identifying the sources of fast revenue growth and/or lagging revenue growth in the tax system, and the components of revenue growth which are within or outside the control of authorities. This paper offers practical lessons for Uganda and other African countries attempting to achieve their revenue targets

The Revenue Effects of Uganda’s Tax Reforms, 1989-2008

The Revenue Effects of Uganda’s Tax Reforms, 1989 - 2008 focuses on the link between tax reforms and revenue mobilization. It explores the options available for policy-makers on revenue mobilization in Uganda and tackles fundamental policy questions about what measures could result into fast revenue growth for Uganda, focusing on the tax reforms and macroeconomic issues. The elasticity and buoyancy indexes computed for the pre- and post-reform periods as well as for the combined period constitute a framework through which the impact of the reforms on each index between the two periods can be discerned. The approach provides the basis for identifying the sources of fast revenue growth and/or lagging revenue growth in the tax system, and the components of revenue growth which are within or outside the control of authorities. This paper offers practical lessons for Uganda and other African countries attempting to achieve their revenue targets

Status of agricultural economics in selected countries in Eastern and Southern Africa

With more than two-thirds of the population living in rural areas and dependent (directly or indirectly) on agricultural activities for employment and incomes, agricultural growth and development are essential for the reduction of poverty and hunger in Sub-Saharan Africa. Yet, agriculture's potential has not been fully tapped. The need for improved capacity to contribute to more effective policies and policymaking is more pronounced than ever before. Concerned about the continued supply of the needed capacity, the International Food Policy Research Institute, in collaboration with the Eastern and Central African Program for Agricultural Policy Analysis (ECAPAPA) and the African Economic Research Consortium (AERC) and with support from the Rockefeller Foundation, initiated a review of the status of agricultural economics in the Eastern and Southern Africa region. The study, undertaken by two eminent economists, confirmed that the gap between the demand and supply of agricultural economists in the region is widening. There is an urgent need to strengthen and expand training in agricultural economics to meet the unsaturated demand. To do so, training institutions in the region will have to diversify the content and method of delivery of their training programs to remain relevant to current and future challenges and to cater to the diverse needs in the public sector, private sector, civil society, and research institutions. Different modalities for improving agricultural economics training in the region are proposed.PRIFPRI1; 2020DG