Alex Halsema

Unlocking Ukraine’s Production Potential

Rural areas in Ukraine are facing a strong dualisation between large corporate farms that often belong to even larger agro-holdings, the modern successors of kolkhozes, on the one hand, and private farms on the other hand, the latter of which comprise a smaller number of relatively dynamic commercial farms and a multitude of small household farms that largely produce for subsistence. This dualization is a reality that cannot be reversed, but there is an urgent need to halt the further concentration as well as the continued fragmentation of holdings, to make export licences available more freely and openly and to stop the persistent loss of soil fertility that results from intensive cultivation without adequate nutrient replenishment. These are only some of the steps required to unlock Ukraine’s production potential and to enable dualised systems to operate more effectively and sustainably. Policies will also have to take into account the fact that agro-holdings currently appear to be far more financially vulnerable now than they seemed to be a few years ago. At any rate, from 2014 onwards, the conflict in the eastern part of the country overshadowed much of all this; this chapter ends with a number of suggestions on how a less ambitious agenda for trade agreements might help reduce some of the tensions.

Are we confusing poverty with preferences

Modifying the national poverty line to the context of observed consumption patterns of the poor is becoming popular. A context-specific poverty line would be more consistent with preferences. This paper provides theoretical and empirical evidence that the contrary holds and that the national poverty line is more appropriate for comparing living standards among the poor, at least under prevailing conditions in Mozambique and Ghana. The problem lies in the risk of downscaling the burden associated with cheap-calorie diets and the low nonfood component of the rural poor. The paper illustrates how observed behavior may neither reveal preferences nor detect heterogeneous preferences among the poor. Rather, the consumption pattern is the upshot of the poverty condition itself. Poverty is confused with preferences if observed cheap-calorie diets are seen as a matter of taste, whereas in fact they reflect a lack of means to consume a preferred diet of higher quality, as food Engel curve estimates indicate. Likewise, a smaller nonfood component is not a matter of a particular distaste, but an adaptation to the fact that various nonfood items (such as transport) and basic services (such as electricity and health) are simply absent in rural areas.

Cartel-fringe models of the oil market: a quantitative assessment

This paper provides a quantitative analysis of different equilibrium concepts employed in the literature on the cartel-fringe models. It is shown that small changes in parameter values can greatly affect outcomes due to changes in extraction schedules. Furthermore, it is shown that results of the closed-loop Stackelberg equilibrium are often closer to the results of the open-loop Nash equilibrium than to those of the open-loop Stackelberg equilibrium.