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Middlemen, Non-Profits, and Poverty

Author

Listed:
  • Chau, Nancy H.

    () (Cornell University)

  • Goto, Hideaki

    () (National Graduate Institute for Policy Studies Japan)

  • Kanbur, Ravi

    () (Cornell University)

Abstract

In many markets in developing countries, especially in remote areas, middlemen are thought to earn excessive profits. Non-profits come in to counter what is seen as middlemen's market power, and rich country consumers pay a "fair-trade" premium for products marketed by such non-profits. This paper provides answers to the following five questions. How exactly do middlemen and non-profits divide up the market? How do the price mark up and price pass-through differ between middleman and non-profits? What is the impact of non-profits entry on the wellbeing of the poor? Should the government subsidize the entry of non-profits, or the entry of middlemen? Should wealthy consumers in the North pay a premium for fair trade products, or should they support fair trade non-profits directly?

Suggested Citation

  • Chau, Nancy H. & Goto, Hideaki & Kanbur, Ravi, 2009. "Middlemen, Non-Profits, and Poverty," IZA Discussion Papers 4406, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4406
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    References listed on IDEAS

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    1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Pol Antràs & Arnaud Costinot, 2011. "Intermediated Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1319-1374.
    2. Lefèvre, Mélanie & Tharakan, Joe, 2011. "Intermediaries, transport costs and interlinked transactions," CEPR Discussion Papers 8615, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    poverty; non-profits; middlemen; market access;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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