Gerdien W. Meijerink

Rural Livelihoods: Interplay Between Farm Activities, Non-farm Activities and the Resource Base

A concentration of poor in rural areas has resulted in a research and policy focus on agricultural technologies and (poor) households impact on soil productivity. But farm households do not live of farming alone, non-farm activities play a principal role even in remote areas. With a unique household-level dataset covering seven regions in Africa and two in Asia we analyze (1) the importance of non-farm income in different geographical zones; (2) the role of geographical factors in determining access to non-farm employment; (3) the role of non-farm income in external input use and soil nitrogen balances. Distinguishing geographical zones based on the distance to urban areas we find the share of non-farm income increasing from 12 percent in the remote areas to 35 percent in peri-urban areas. Geographical location is found to explain a major part of the variation in individual non-farm participation, besides characteristics like education and gender. At household level we find non-farm income not playing a role of significance in explaining external input use, inorganic fertilizer use nor changes in the nitrogen balance. Households thus appear not to invest non-farm income in agriculture. This limits the contribution of non-farm income to reducing widespread soil nutrient depletion witnessed in Africa.

New institutional economics: Douglass North and Masahiko Aoki

This chapter discusses the possible contribution of new institutional economics (NIE) to the transition literature. The two fields seem to have developed in parallel universes, and there has been no cross-fertilisation. This essay presents some possible starting points for exchange. In an overview of NIE, Brousseau and Glachant (2002: 4) say, ‘[T]he strength of NIE lies in its proposal to analyze governance and coordination in all sets of social arrangements.’ They warn, however, that ‘the design of institutional systems is not based on optimisation computation but on trial and error, on the implementation of solutions that should be recognized as imperfect and temporary…. In such a context, it is essential to take into account the management of changes together with the processes of evolution.’ NIE thus has something to say about managing transitions, although it might provide a slightly different perspective on change management than that in the transition literature.