Zambia - The Relevance of a Rules-Based Maize Marketing Policy : An Experimental Case Study of Zambia

A critical barrier to achieving food security and rural income growth in the mixed food marketing systems characterizing many Eastern and Southern African countries revolves around the way that governments and the private sector interact. In shortage years, governments may question the capacity of the private sector to import maize, and thus arrange imports on their own to cover the shortfall. At the same time, traders' import decisions depend on their expectations regarding governments' response to food shortages. Social dilemmas can arise if traders are uncertain about future government behavior or lack trust in official announcements. This paper argues that well-functioning markets depend on transparent and predictable government behavior underpinned by mutual trust and cooperation. The authors report on an economic policy experiment based on a stylized model of the Zambian maize market. The experiment facilitates a comparison between the current government policy of discretionary interventionism and a rules-based policy in which the government precommits itself to a future course of action. A simple precommitment rule can overcome the social dilemma by reducing the risk of food crises and provide appropriate incentives for private traders' participation in the market, thereby enhancing economic efficiency. Exploring mechanisms that can support more predictable and rules-based policy responses to food shortages may therefore be beneficial to the Government of Zambia and to other governments in the region.

Bibliographic Details

Main Author:	World Bank
Format:	Other Agricultural Study biblioteca
Language:	English en_US
Published:	Washington, DC 2007-12-18
Subjects:	ACUTE FOOD SHORTAGES, AGRICULTURAL DEVELOPMENT, AGRICULTURAL ECONOMICS, AGRICULTURAL POLICY, AGRICULTURAL PRODUCTIVITY, AGRICULTURE, ALLOCATION, AVERAGE PRICE, COMPETITIVENESS, CONFIDENCE, CONSUMER DEMAND, CONSUMER PRICE, CONSUMER PRICES, CONSUMER WELFARE, DEMAND ELASTICITY, DEMAND FUNCTION, DEMAND FUNCTIONS, DEMOCRACY, DISCRETION, DOMESTIC MARKET, ECONOMIC BEHAVIOR, ECONOMIC GROWTH, ECONOMIC HISTORY, ECONOMICS, EXPENDITURES, EXTERNAL MARKETS, FEED, FOOD AID, FOOD CRISIS, FOOD MARKETING, FOOD MARKETING SYSTEMS, FOOD MARKETS, FOOD POLICY, FOOD POLICY RESEARCH, FOOD PRICES, FOOD SECURITY, FOOD SECURITY POLICY, FOOD SECURITY RESEARCH, FOOD SHORTAGE, FOOD SHORTAGES, FOOD STOCKS, FOOD SUPPLIES, GAME THEORY, GOVERNMENT INTERVENTION, GOVERNMENT OFFICIALS, GRAIN PRODUCTION, IMPORTING MAIZE, INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE, INVESTIGATION, MAIZE, MAIZE IMPORTS, MAIZE MARKET, MAIZE MARKET REFORMS, MAIZE MARKETING, MAIZE MEAL, MAIZE POLICY, MAIZE PRODUCTION, MAIZE REVOLUTION, MAIZE SECTOR, MAIZE SUPPLY, MAIZE TRADING, MARKET CONDITIONS, MARKET EQUILIBRIUM, MARKET INFORMATION, MARKET LIBERALIZATION, MARKET PERFORMANCE, MARKET POWER, MARKET PRICE, MARKET PRICES, MARKET REFORM, MARKET REFORMS, MARKET RISKS, MARKETING, MARKETING BOARD, MARKETING BOARDS, MARKETING POLICY, MARKETING SITUATION, MARKETING SYSTEM, MEAL, MILLERS, MINISTER, MINISTERS, NATIONAL FARMERS UNION, NATIONAL FOOD SECURITY, OPPORTUNITY COST, PATRONAGE, POLITICAL ECONOMY, PRICE STABILITY, PRICE STABILIZATION, PRICING POLICIES, PRIVATE SECTOR, PRODUCER PRICE, PRODUCER PRICES, PRODUCTIVITY, PUBLIC GOODS, PUBLIC SECTOR, PURCHASING, REPUBLIC, RULING PARTY, SALE, SALES, SMALLHOLDER AGRICULTURE, SMALLHOLDER GRAIN, SMALLHOLDER GRAIN PRODUCTION, STATE INTERVENTION, STOCKS, SUB-SAHARAN AFRICA, SUBSIDIZED GRAIN, SUBSTITUTE, SUPPLIERS, SURPLUSES, TRADE POLICY, TRANSACTION COSTS, TRANSPARENCY, WHITE MAIZE,
Online Access:	http://documents.worldbank.org/curated/en/2007/12/8996495/zambia-relevance-rules-based-maize-marketing-policy-experimental-case-study-zambia http://hdl.handle.net/10986/7647
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