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Old Problems in the New Solutions? Politically Motivated Allocation of Program Benefits and the "New" Fertilizer Subsidies

  • Banful, Afua Branoah

Summary Fertilizer subsidies have been reinstituted in many African countries with innovations seeking to avoid the downsides of past programs. The new subsidy paradigm however does not address how to curtail political manipulation which exacerbated inefficiencies of previous programs. This paper analyzes whether politics affected voucher allocations in Ghana's 2008 fertilizer subsidy program. We find that more vouchers were targeted to districts that the ruling party had lost in the previous presidential elections and more so in districts that had been lost by a higher percentage margin. This evidence shows that a significant threat to the efficiency of fertilizer subsidies remains.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 7 (July)
Pages: 1166-1176

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:7:p:1166-1176
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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  1. Minot, Nicholas & Benson, Todd, 2009. "Fertilizer subsidies in Africa: Are vouchers the answer?," Issue briefs 60, International Food Policy Research Institute (IFPRI).
  2. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
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  4. Shawn Cole, 2009. "Fixing Market Failures or Fixing Elections? Agricultural Credit in India," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 219-50, January.
  5. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series 1999:24, Uppsala University, Department of Economics.
  6. Case, Anne, 2001. "Election goals and income redistribution: Recent evidence from Albania," European Economic Review, Elsevier, vol. 45(3), pages 405-423, March.
  7. Avinash Dixit & John Londregan, 1998. "Ideology, Tactics, And Efficiency In Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 497-529, May.
  8. Jayne, T. S. & Govereh, J. & Wanzala, M. & Demeke, M., 2003. "Fertilizer market development: a comparative analysis of Ethiopia, Kenya, and Zambia," Food Policy, Elsevier, vol. 28(4), pages 293-316, August.
  9. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  10. Krausova, Marika & Banful, Afua Branoah, 2010. "Overview of the agricultural input sector in Ghana," IFPRI discussion papers 1024, International Food Policy Research Institute (IFPRI).
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