The Benefits of a Rules-Based Maize Marketing Policy: Results of an Experimental Study of Zambia

• Strategic interaction between market players affects the performance of grain markets and the risk of food crises. Strategic dilemmas can arise if traders don’t trust government announcements on future maize purchases or if the government does not trust stock estimates provided by the private sector. • Government “pre-commitment” (announcing in advance how and when it will operate in the market and then behaving in a consistent manner) is found to produce superior welfare outcomes to “discretionary intervention” whereby the government operates in an unpredictable and ad hoc manner in markets. Situations of food shortage and over-supply were much more frequent under a discretionary policy environment because of the risk of poor coordination between the government and the private sector. • Exploring mechanisms that can support more predictable and rules-based policy responses may therefore be beneficial to the Government of Zambia and the country as a whole.


Issue Date:
2007
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/54636
Total Pages:
6
JEL Codes:
Q20
Series Statement:
Food Security Research Project- Zambia, Policy Synthesis
29




 Record created 2017-04-01, last modified 2017-08-25

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