Is relaxing equity constraints panacea for Malawi’s green gold expansion? A fuzzy regression discontinuity design approach

Abstract

This paper assesses the causal effect of relaxing equity constraints on the cultivation of tobacco in Malawi, a crop viewed by the local population as Malawi’s green gold. Applying the counterfactual outcome framework we find that relaxing equity constraints substantially increases the amount of tobacco land cultivated by smallholder farmers, suggesting that there is scope for increasing tobacco production once equity constraints are relaxed among producers. These findings provide justification for extensive public financing of tobacco production in Malawi.tobacco; equity constraints; counterfactual; treatment effect; Malawi