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Incentives and static and dynamic gains from market reform: rice production in Vietnam

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  • Nhu Che, Tuong
  • Kompas, Tom
  • Vousden, Neil

Abstract

This article develops a dynamic model to account for the enhanced incentive effects that result from market reform through a move toward private property rights and competitive markets. Reform is captured through an emerging profits function which depends on effective prices and incentives to work harder. Static and dynamic output gains from reform are derived through increases in total factor productivity and induced capital accumulation. The model is applied to rice production in Vietnam over the period 1976–94. The more extensive is market reform, the larger the effects found on rice output, the capital stock and transitional growth rates, suggesting that incentives and more competitive markets matter greatly.

Suggested Citation

  • Nhu Che, Tuong & Kompas, Tom & Vousden, Neil, 2001. "Incentives and static and dynamic gains from market reform: rice production in Vietnam," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(4), pages 1-26.
    • Handle: RePEc:ags:aareaj:117727
    DOI: 10.22004/ag.econ.117727
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    References listed on IDEAS

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    4. Che, T.N. & Kompas, T. & Vousden, N., 1998. "Liberalisation, Incentives and Vietnamese Agricultural Growth," Papers 351, Australian National University - Department of Economics.
    5. McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
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    Cited by:

    1. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
    2. Minh-Tam T. Bui & Arayah Preechametta, 2016. "Land Inequality or Productivity: What Mattered in Southern Vietnam after 1975?," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(2), pages 300-319, May.
    3. Alastair M. Smith, 2010. "Lack Of Rigour In Defending Fairtrade: Some Important Clarifications Of A Distorting Account – A Reply To Peter Griffiths," Economic Affairs, Wiley Blackwell, vol. 30(2), pages 50-53, June.
    4. Tom Kompas, 2004. "Market reform, productivity and efficiency in Vietnamese rice production," International and Development Economics Working Papers idec04-4, International and Development Economics.
    5. Tom Kompas & Tuong Nhu Che & Hoa Thi Minh Nguyen & Ha Quang Nguyen, 2012. "Productivity, Net Returns, and Efficiency: Land and Market Reform in Vietnamese Rice Production," Land Economics, University of Wisconsin Press, vol. 88(3), pages 478-495.
    6. Nguyen, Hoa-Thi-Minh & Do, Huong & Kompas, Tom, 2021. "Economic efficiency versus social equity: The productivity challenge for rice production in a ‘greying’ rural Vietnam," World Development, Elsevier, vol. 148(C).
    7. Klaus Deininger & Songqing Jin, 2008. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 67-101, February.
    8. Ron Duncan, 2003. "Agricultural and resource economics and economic development in Aboriginal communities," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(3), pages 307-324, September.

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    Crop Production/Industries; Marketing;

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