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 shorta...
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| Format: | Other Agricultural Study |
| Language: | English en_US |
| Published: |
Washington, DC
2012
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| 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 |
| Summary: | 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. |
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