Jonathan Kydd

Overcoming Market Constraints on Pro‐Poor Agricultural Growth in Sub‐Saharan Africa

In sub-Saharan Africa, there is fairly broad agreement that increased investment in key public goods such as roads and communications infrastructure, agricultural research and water control will be required if revitalised agricultural development is to take place. However, it has proved more difficult to reach agreement on what needs to be done to improve the performance of agricultural markets. In this article we set out an agenda for investment and policy reform in this area, providing a brief theoretical examination of the co-ordination problems involved before examining in turn demand and supply constraints affecting smallholder farmers, and policies for price stabilisation and the co-ordination of support services. We also argue that increased attention needs to be paid to governance issues.

Structural change in Malawi since independence: Consequences of a development strategy based on large-scale agriculture

Abstract This paper investigates the nature of the structural change which has occured in the Malawian economy since independence and identifies key policies pursued by the government which it is argued have been decisive in shaping this development. The salient feature of structural change is shown to be the rapid growth of large-scale agriculture, associated with an equally rapid transfer of labour into wage employment and a decline in the importance of peasant production. The implications of these changes for living standards and future development and policy are considered.

The Malawi 2002 food crisis: the rural development challenge

The recent food crisis in Malawi has drawn stark attention to the failures of development policies over the last 40 years to create wealth and develop a robust economy or the markets on which such an economy must depend. Current market liberalisation policies have achieved at best mixed success in addressing the generic problems inhibiting smallholder agricultural development: low returns to farmers’ and service providers’ investments, with high risks from natural shocks, price variations, coordination failure, and opportunistic behaviour. Post-independence institutional mechanisms in Malawi were more successful in addressing some of these problems, in particular those of coordination risk, although external and internal difficulties led to increasing costs and declining effectiveness of these mechanisms and their collapse. They do provide, however, important lessons about the different failures of both market intervention and market liberalisation policies. We suggest and discuss a set of critical elements needed for economic development and wealth creation in poor rural areas, and propose four basic principles to guide the search for and design and implementation of effective rural development strategies and policies.

Agricultural development and pro-poor economic growth in sub-Saharan Africa: potential and policy

There is widespread concern at continuing and deepening poverty and food insecurity in sub‐Saharan Africa and the lack of broad‐based economic growth. There is also debate about agricultures role in driving pro‐poor economic growth, some arguing it has a critical role while others see it is as largely irrelevant. We suggest that both sets of arguments pay insufficient attention to important institutional issues, and that agriculture has a critical role to play, largely by default, as there are few other candidates with the same potential for supporting broad‐based pro‐poor growth. There are, however, immense challenges to agricultural growth. In considering the costs and benefits of investment in agricultural growth, however, regard must also be given to the economic and social costs of rural stagnation and to providing safety nets in situations of enduring poverty. Policy needs to focus more on agriculture, and recognize and address the diversity of institutional, trade, technological and governance challenges to poverty‐reducing growth in Africa.

The Washington Consensus on Poor Country Agriculture: Analysis, Prescription and Institutional Gaps

This article reviews the analysis and prescriptions of the current ‘Washington Consensus on Agriculture’ (WCA). The WCA contains much that is to be applauded, but there are also gaps and inconsistencies within and between the analysis of current problems and the prescriptions to address them. It is suggested that the worrying decline in aid to agriculture is related to gaps in the WCA, which fail to point to important avenues of intervention. The gaps lie mainly in the field of ‘institutional development’ (as this term is defined here).

The effectiveness of structural adjustment lending: Initial evidence from Malawi

Abstract The World Banks new programs of structural adjustment lending are likely to prove most effective with those governments which demonstrate shared ideals in their approach to economic adjustment and policy reform. Malawi has long been regarded as a country placing great reliance on the market in resource allocation, showing restraint in public sector expansion and retaining a strong export orientation. The balance-of-payments difficulties and the deterioration in economic circumstances which began in 1980 did not arise solely from “external shocks,” but the structural adjustment lending programs introduced in 1981 as a means of easing the painful reform process found root in a fertile and responsive policy environment. This paper chronicles the first two SALs to Malawi, reviewing in particular the specific policy reforms advocated and required by the Bank, the extent of their implementation and the provisional effects on the Malawi economy.

The Return of Malawian Labour From South Africa and Zimbabwe

This article examines an unusual phenomenon in the context of modern African labour migration. It explains how Malawi which had long been a significant source of migrant workers for its neighbours managed to withdraw over one-half of its international labour force from abroad in the first six years of the 1970s and to integrate these individuals into the domestic economy within a very short period of time. Traumatic movements of large numbers of migrant workers have been all too common in contemporary Africa usually manifested as expulsions from host countries during periods of economic stress. A recent notable example was the exodus of about a million foreign workers from Nigeria in the course of one month in 1983. What is unusual about the reduction in international labour migration from Malawi is that it was induced mainly by economic opportunities rather than by coercion. (excerpt)

The economic analysis of commodity systems: Extending the Policy Analysis Matrix to account for environmental effects and transactions costs

Abstract In a context in which the framework of economic policy is changing radically, the objective of agricultural research programmes should be to support the development of systems which look likely to be ‘winners’ in the future. The Policy Analysis Matrix (PAM) framework permits sensitivity analysis in which an inventory of possible ‘feasible’ technological developments may be examined for their impact on the underlying comparative advantage (implicitly, the longer-run competitive advantage) of the system. This is a fruitful procedure for the integration of technological and economic analysis, and can make a substantial contribution to the identification of ‘best-bet’ lines of technological development. This paper begins with a brief account of the role and usefulness of the PAM, a relatively straightforward logical framework for policy analysis, from which a range of ‘policy indicators’ may be estimated. The most important of these indicators is the Domestic Resource Cost (DRC) ratio, an approximate indicator of the ‘underlying comparative advantage’ of a commodity system, a characteristic which may be obscured by an overlay of policy interventions and ‘market failures’. The paper then explores two areas in which the use of the PAM can be extended. First, it examines the possibilities offered by the application of ‘new institutional economics’ (NIE) in a PAM context to changing rural market conditions precipitated by withdrawal of the state. Second, the paper reviews how PAM may be modified to incorporate environmental costs and benefits, and so address more adequately the sustainability of commodity systems.

Agricultural market liberalization and structural adjustment in sub-Saharan Africa.

Abstract This paper explores the linkages between structural adjustment and the liberalization of agricultural marketing in sub‐Saharan Africa (SSA). It examines the nature of structural problems, which have been manifested in stagnating output and balance of payments difficulties. Policy responses are described, in terms of short term macroeconomic stabilization and longer term growth‐oriented adjustment policies. The process of structural adjustment in Africa is surveyed, and policies and stages in the liberalization of markets are considered. Debates on agricultural marketing in SSA are reviewed. This leads into an analysis of the specific issues which arise while marketing policy reform proceeds as an integral part of structural adjustment strategies.

A postscript: Macroeconomics and structural adjustment — the minimum for water sector specialists

The need for a grasp of macroeconomic concepts and methods for microeconomists and technical specialists is stressed. At this juncture policy failure is commonplace. Experience in using the World Bank Structural Adjustment in Lowinca as a training exercise is discussed.