Meso-Economic Filters Along the Policy Chain: Understanding the links between policy reforms and rural poverty in Latin America
The policy reforms introduced in Latin America in the 1980s and 1990s have induced profound and beneficial changes in the overall productive structure of most Latin American countries, and particularly concerning the increased competitiveness and profitability of some agro-export activities. Yet, even if a relatively stable macroeconomic environment has been achieved, agricultural price distortions have been removed, and inefficient governmental agencies serving the sector have been dismantled, high levels of rural poverty remain in the region. What went wrong? How have the intended impacts of the reforms been transmitted to the rural sector, and how have farmers responded to the newly created incentive structure, and how has this influenced the observed poverty outcomes? Despite several attempts to introduce new dimensions to policy analysis, a consistent theoretical framework is still lacking capable of accounting for the various sources of policy and market failures leading to such unsatisfactory policy outcomes. The objective of this paper is to propose a framework aimed at developing a better understanding of the reasons of the failures of the past to inform the current policy debate. The proposed framework takes the moves from the theoretical debate on the importance of considering transaction costs and institutions in policy design and implementation. It develops a synthesis of macro-, meso- and micro-economic perspectives, that focuses on the roles of the structural and institutional factors mediating the effects of policy reforms as they “trickle down” to rural households. Such synthesis is realised through a conceptualisation in three levels of filters intervening at various level of the “policy chain”, and by developing a model linking those to the household decision-making level. The paper is organised into four parts. Part one provides stylised background information about policy reforms and rural poverty outcomes in Latin America. In the second part two main bodies of literature are reviewed: a) the “meso-economy” level of market mechanisms, institutional arrangements, and the administrative procedures mediating the “public” provision of goods and services; and b) the “micro-economy” level of rural farm household models. In the third part, the insights provided by these two bodies of literature are used to develop an analytical framework integrating the macro-economy to agricultural household models, as mediated by the mesoeconomy links. Finally, in the fourth part some policy implications are drawn and research guidelines proposed.
|Date of creation:||2001|
|Publication status:||Published in World Development, 2002, vol. 30, issue 11, pages 1865-1884|
|Contact details of provider:|| Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy|
Phone: +39(6) 57051
Fax: +39 06 57055522
Web page: http://www.fao.org/es/esa/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven Were Omamo, 1998. "Transport Costs and Smallholder Cropping Choices: An Application to Siaya District, Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 116-123.
- Bardhan, Pranab & Udry, Christopher, 1999. "Development Microeconomics," OUP Catalogue, Oxford University Press, number 9780198773719, December.
- de Janvry, Alain & Sadoulet, Elisabeth, 2000. "Rural poverty in Latin America: Determinants and exit paths," Food Policy, Elsevier, vol. 25(4), pages 389-409, August.
- Steven Were Omamo, 1998. "Farm-to-market transaction costs and specialisation in small-scale agriculture: Explorations with a non-separable household model," Journal of Development Studies, Taylor & Francis Journals, vol. 35(2), pages 152-163.
- Michael Kevane, 1996. "Agrarian Structure and Agricultural Practice: Typology and Application to Western Sudan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 236-245.
- Joseph E. Stiglitz, 1974.
"Incentives and Risk Sharing in Sharecropping,"
Review of Economic Studies,
Oxford University Press, vol. 41(2), pages 219-255.
- Hymer, Stephen H & Resnick, Stephen, 1969. "A Model of an Agrarian Economy with Nonagricultural Activities," American Economic Review, American Economic Association, vol. 59(4), pages 493-506, Part I Se.
- North, Douglass C, 1994.
"Economic Performance through Time,"
American Economic Review,
American Economic Association, vol. 84(3), pages 359-368, June.
- Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
- Michael Hubbard, 1997. "The 'New Institutional Economics' In Agricultural Development: Insights And Challenges," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 239-249.
- John J. Wallis & Douglass North, 1986. "Measuring the Transaction Sector in the American Economy, 1870-1970," NBER Chapters, in: Long-Term Factors in American Economic Growth, pages 95-162 National Bureau of Economic Research, Inc.
- Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-98, June.
- Jill E. Hobbs, 1997. "Measuring the Importance of Transaction Costs in Cattle Marketing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1083-1095.
- T Vernimmen & W Verbeke & G van Huylenbroeck, 2000. "Transaction cost analysis of outsourcing farm administration by Belgian farmers," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(3), pages 325-345, September.
- Staal, Steven & Delgado, Christopher & Nicholson, Charles, 1997. "Smallholder dairying under transactions costs in East Africa," World Development, Elsevier, vol. 25(5), pages 779-794, May.
- Buckley, Peter J & Chapman, Malcolm, 1997. "The Perception and Measurement of Transaction Costs," Cambridge Journal of Economics, Oxford University Press, vol. 21(2), pages 127-145, March.
- Cornia, Giovanni Andrea & Jolly, Richard & Stewart, Frances (ed.), 1987. "Adjustment with a Human Face: Volume 1, Protecting the Vulnerable and Promoting Growth," OUP Catalogue, Oxford University Press, number 9780198286097, December.
- de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-417, November.
- Yutopoulos, Pan A. & Lau, Lawrence J., 1974. "On modeling the agricultural sector in developing economies : An integrated approach of micro and macroeconomics," Journal of Development Economics, Elsevier, vol. 1(2), pages 105-127, September.
- Hans Löfgren & Sherman Robinson, 1999. "Nonseparable Farm Household Decisions in a Computable General Equilibrium Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 663-670.
- Stiglitz, Joseph E., 1986. "The new development economics," World Development, Elsevier, vol. 14(2), pages 257-265, February.
When requesting a correction, please mention this item's handle: RePEc:fao:wpaper:0208. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gustavo Anríquez)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.