The Developing Economies
Volume 38, Number 3 (September 2000)
■ The Developing Economies Volume 38, Number 3 (September 2000)
■ B5
■ 105pp
■ September 2000
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CONTENTS
The APEC Food System: Implications for Agricultural and Rural Development Policy (69KB) / John Gilbert, Robert Scollay, and Thomas Wahl
Short-Term Cycles in Primary Commodity Prices (41KB) / Walter C. Labys, Eugene Kouassi, and Michel Terraza
Incentives Embedded in Institutions: The Case of Share Contracts in Ghanaian Cocoa Production (111KB) / Tsutomu Takane
Book Reviews
Market Liberalism: American Foreign Policy toward China by Gordon C. K. Cheung (20KB) / Yoshifumi Nakai
Abstract
Takao
Fukuchi,
"Inflationary
Burst
and
Free
Fall
of
the
Indonesian
Economy
during
the
Krismon
Period
-
A
Vicious
Circle
of
Real
and
Monetary
Aspects
-,"
pp.
257-307.
Indonesia
experienced
Krismon
(severe
economic
crisis)
after
August
1997.
Economic
downfall
and
rapid
inflation
occurred
during
one
year
followed
by
additional
stagnation
for
six
months.
Krismon
was
characterized
by
a
short
duration,
interaction
between
political
instability
and
economic
downfall,
and
interrelation
between
collapse
of
real
activities
and
severe
inflation.
First
I
estimated
the
exchange
rate
function
based
on
normal
period
data,
and
interpreted
the
extrapolation
error
as
noneconomic
disturbance
(or
surrogate
of
political
instability),
and
included
it
as
an
exogenous
variable.
Then
I
constructed
a
monthly
model
with
31
equations
(1996-98),
which
included
main
real
and
monetary
variables.
In
the
final
test,
MAPE
was
controlled
within
10
per
cent
after
36
months.
Another
simulation
showed
that
the
rapid
growth
of
the
economy
could
have
continued
based
on
the
specific
changes
of
exogenous
variables.
Thus,
the
model
explained
the
causes
and
mechanism
of
Krismon,
and
also
decomposed
the
GDP
loss
into
several
factors.
John
Gilbert,
Robert
Scollay,
and
Thomas
Wahl,
"The
APEC
Food
System:
Implications
for
Agricultural
and
Rural
Development
Policy,"
pp.
308-329.
The
APEC
Food
System
(AFS)
proposal
is
a
new
development
in
the
area
of
APEC
agricultural
and
food
markets.
It
provides
an
excellent
example
of
the
comprehensive
approach
advocated
by
APEC,
combining
elements
of
both
trade
and
investment
liberalization
and
facilitation
(TILF)
and
economic
and
technical
cooperation
("Ecotech").
It
is
also
a
proposal
that
deals
with
one
of
the
most
controversial
aspects
of
Asia-Pacific
economic
relations.
We
use
the
results
of
a
recursive
dynamic
CGE
model
to
provide
a
policy
commentary
on
the
AFS
and
its
effect
on
the
developing
economies
of
APEC.
The
model
is
designed
to
capture
the
potential
effects
of
agricultural
reform
on
regional
welfare
and
agricultural
incomes.
Although
income
distribution
effects
are
likely
to
be
problematic
for
APEC,
the
Ecotech
components
of
the
AFS
may
offer
the
potential
to
mitigate
these
effects,
and
allow
APEC
to
realize
the
substantial
positive
net
welfare
gains
of
agricultural
reform.
Walter
C.
Labys,
Eugene
Kouassi,
and
Michel
Terraza,
"Short-Term
Cycles
in
Primary
Commodity
Prices,"
pp.
330-42.
Commodity
price
fluctuations
have
always
been
of
importance
to
developing
countries.
While
positive
price
swings
have
led
to
rising
export
earnings
and
domestic
income
growth,
negative
price
swings
have
lowered
income
growth
and
disrupted
related
investment
programs.
Much
of
the
research
in
this
area
has
been
directed
to
the
instability
problem,
often
without
recognizing
that
the
underlying
price
fluctuations
might
be
cyclical
and
to
a
certain
extent
predictable.
While
previous
studies
have
emphasized
that
commodity
price
movements
have
often
led
and
sometimes
caused
major
turns
in
business
cycles,
several
studies
have
focused
on
the
cyclical
nature
of
commodity
price
movements
themselves.
Continuing
in
this
direction,
the
purpose
of
this
study
is
to
further
define
the
short-term
cyclical
nature
of
commodity
prices.
We
thus
begin
by
using
the
basic
NBER
chronology
to
determine
the
particular
timing,
frequency,
and
amplitude
of
price
cycles.
We
then
confirm
the
existence
of
such
cycles
by
establishing
statistical
significance
using
the
structural
time
series
(STS)
approach.
Our
conclusions
discuss
the
periodicity
of
the
cycles
for
different
commodities
and
their
implications
for
developing
country
policy
making.
Koichi
Fujita,
"Credit
Flowing
from
the
Poor
to
the
Rich:
The
Financial
Market
and
the
Role
of
the
Grameen
Bank
in
Rural
Bangladesh,"
pp.
343-73.
Based
on
an
intensive
economic
survey
in
two
villages
in
Bangladesh,
this
paper
investigates
the
structure
of
rural
financial
markets
and
the
role
of
the
Grameen
Bank
in
that
structure.
Major
findings
include:
(1)
informal
credit
flows
basically
from
the
poor
to
the
rich
mainly
in
the
form
of
long-term
credit
with
land
mortgaging;
(2)
trickle
down
effects
of
the
Green
Revolution
and
the
development
of
off-farm
job
opportunities
generate
savings
among
the
poor,
which
are
circulated
in
informal
financial
channels;
and
(3)
the
Grameen
Bank
provided
"advancements
for
future
savings"
among
the
poor
and
thus
basically
succeeded
in
poverty
alleviation
by
encouraging
hard
work
resulting
in
saving,
not
by
promoting
micro-enterprises
per
se.
The
Grameen
Bank
is
basically
effective
for
poor
people
who
have
fairly
stable
regular
non-farm
income
sources;
thus,
it
is
not
effective
in
helping
the
abject
poor
or
economically
backward
rural
areas.
Tsutomu
Takane,
"Incentives
Embedded
in
Institutions:
The
Case
of
Share
Contracts
in
Ghanaian
Cocoa
Production,"
pp.
374-97.
Providing
price
incentives
to
farmers
is
usually
considered
essential
for
agricultural
development.
Although
such
incentives
are
important,
regarding
price
as
the
sole
explanatory
factor
is
far
from
satisfactory
in
understanding
the
complex
realities
of
agricultural
production
in
Africa.
By
analyzing
the
share
contracts
widely
practiced
in
Ghana,
this
article
argues
that
local
institutions
such
as
land
tenure
systems
and
agrarian
contracts
provide
strong
incentives
and
disincentives
for
agricultural
production.
Based
on
data
derived
from
fieldwork
in
the
1990s,
the
study
analyzes
two
types
of
share
contracts
and
the
incentive
structures
embedded
in
them.
The
analysis
reveals
that
farmers'
investment
behavior
needs
to
be
understood
in
terms
of
both
short-term
incentive
to
increase
yield
and
long-term
incentive
to
strengthen
land
rights.
The
study
concludes
that
the
role
of
price
incentives
in
agricultural
production
needs
to
be
reconsidered
by
placing
it
in
wider
incentive
structures
embedded
in
local
institutions.