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Monopsony and Time-Consistency: Sustainable Pricing Policies for Perennial Crops

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  • Besley, Timothy

Abstract

Since farmers in developing countries must make sunk investments to produce perennial crops, governments, in the guise of state-run marketing boards, face constraints on maximal sustainable price which can be charged by a marketing board assuming that "punishments" involve reversion to subsistence by untrusting farmers. This maximal price balances concerns about revenue extraction against the incentive of governments to cheat by capitalizing on sunk investments. Copyright 1997 by Blackwell Publishing Ltd

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Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 1 (1997)
Issue (Month): 1 (February)
Pages: 57-70

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Handle: RePEc:bla:rdevec:v:1:y:1997:i:1:p:57-70

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Cited by:
  1. Margaret McMillan, 1998. "A Dynamic Theory of Primary Export Taxation: Evidence From Sub-Saharan Africa," Discussion Papers Series, Department of Economics, Tufts University 9812, Department of Economics, Tufts University.
  2. Margaret S. McMillan & William A. Masters, 2000. "Africa's growth trap: a political-economy model of taxation, R&D and investment," CSAE Working Paper Series 2000-14, Centre for the Study of African Economies, University of Oxford.
  3. Azam, Jean-Paul & Bates, Robert & Biais, Bruno, 2009. "Political Predation and Economic Development," TSE Working Papers 09-025, Toulouse School of Economics (TSE).
  4. Kolavalli, Shashidhara & Vigneri, Marcella & Maamah, Haruna & Poku, John, 2012. "The partially liberalized cocoa sector in Ghana: Producer price determination, quality control, and service provision," IFPRI discussion papers 1213, International Food Policy Research Institute (IFPRI).
  5. Kala Krishna, 1995. "The Adding Up Problem: A Targeting Approach," NBER Working Papers 4999, National Bureau of Economic Research, Inc.
  6. Margaret S. McMillan, 1999. "Foreign Direct Investment: Leader or Follower?," Discussion Papers Series, Department of Economics, Tufts University 9901, Department of Economics, Tufts University.
  7. Schiff, Maurice, 1994. "Commodity exports and the adding up problem in developing countries : trade, investment, and lending policy," Policy Research Working Paper Series 1338, The World Bank.
  8. John McLaren, 2003. "Institutional Elements of Tax Design and Reform," World Bank Publications, The World Bank, number 15170, October.
  9. Willian A Masters and Margaret S McMillan, 2000. "Africa’s growth trap: a political-economy model of taxation, R&D and investment," Economics Series Working Papers WPS/2000-14, University of Oxford, Department of Economics.
  10. Vigneri, Marcella & Santos, Paulo, 2008. "What does liberalization without price competition achieve?: The case of cocoa in Ghana," GSSP working papers 14, International Food Policy Research Institute (IFPRI).
  11. Margaret S. McMillan & William A. Masters, 2003. "An African Growth Trap: Production Technology and the Time-Consistency of Agricultural Taxation, R&D and Investment," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 179-191, 05.

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