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Structural adjustment and market imperfections: a stylized village economy-wide model with non-separable farm households

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  • HOLDEN, STEIN T.
  • TAYLOR, J. EDWARD
  • HAMPTON, STEPHEN

Abstract

Village economies and peasant households represent the main link between the economy and the environment in sub-Saharan Africa. The links from the macro level and down to the household level and further to the natural resource base are complex. It may therefore be difficult to predict the impact of macro policies and external shocks on the environment. This paper presents a typology of village economies and village economy-wide models. The framework is applied to a special case where a model is proposed and estimated to examine the impacts of external shocks, including structural adjustment policies, on cash-crop production and chitemene (shifting cultivation) in a remote Zambian village characterized by a missing (or negligible) labour market, input supply constraints, and credit rationing. Our findings indicate that structural adjustment policies, by decreasing the profitability of maize production, may encourage households to increase their chitemene production, resulting in more rapid deforestation.

Suggested Citation

  • Holden, Stein T. & Taylor, J. Edward & Hampton, Stephen, 1999. "Structural adjustment and market imperfections: a stylized village economy-wide model with non-separable farm households," Environment and Development Economics, Cambridge University Press, vol. 4(1), pages 69-87, February.
    • Handle: RePEc:cup:endeec:v:4:y:1999:i:01:p:69-87_00
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    Cited by:

    1. Elizabeth L. Roos & Heinrich R. Bohlmann & Jan H. van Heerden & Nicholas Kilimani, 2016. "Counting the cost of drought induced productivity losses in an agro-based economy: The case of Uganda," Working Papers 616, Economic Research Southern Africa.
    2. Holden, Stein T., 2018. "The Economics of Fertilizer Subsidies," CLTS Working Papers 9/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    3. Mamoudou Ba & Amar Anwar & Mazhar Mughal, 2021. "Non‐farm employment and poverty reduction in Mauritania," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(3), pages 490-514, April.
    4. J. Taylor & Irma Adelman, 2003. "Agricultural Household Models: Genesis, Evolution, and Extensions," Review of Economics of the Household, Springer, vol. 1(1), pages 33-58, January.
    5. Swallow, Kimberly A. & Swallow, Brent M., 2015. "Explicitly integrating institutions into bioeconomic modeling:," IFPRI discussion papers 1420, International Food Policy Research Institute (IFPRI).
    6. Chen, Jing & Rozelle, Scott, 2003. "Market Emergence And The Rise And Fall Of Backyard Hog Production In China," 2003 Annual meeting, July 27-30, Montreal, Canada 21969, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. J. Edward Taylor & Karen Thome, 2012. "A Methodology for Local Economy-wide Impact Evaluation (LEWIE) of Cash Transfers," One Pager 183, International Policy Centre for Inclusive Growth.
    8. Wassie Berhanu, 2017. "Informal Cross border Livestock Trade Restrictions in Eastern Africa: Is there a case for free flows in Ethiopia-Kenyan Borderlands?," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 25(1), March.
    9. Komarek, Adam M., 2010. "Crop diversification decisions: the case of vanilla in Uganda," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 49(3), pages 1-16.
    10. Morgan, Stephen N. & Mason, Nicole M. & Levine, N. Kendra & Zulu-Mbata, Olipa, 2019. "Dis-incentivizing sustainable intensification? The case of Zambia’s maize-fertilizer subsidy program," World Development, Elsevier, vol. 122(C), pages 54-69.
    11. J. Edward Taylor & George Dyer, 2009. "Migration and the Sending Economy: A Disaggregated Rural Economy-Wide Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 45(6), pages 966-989.
    12. Kuiper, Marijke H., 2002. "Endogenous Transaction Costs And Tradability In A Micro Economywide Model - A Stylized Application With Nonseparable Households," 2002 Annual meeting, July 28-31, Long Beach, CA 19832, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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