Middlemen, Non-Profits, and Poverty

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?


Issue Date:
Aug 16 2009
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/55931
Total Pages:
41
JEL Codes:
F15; I32; L3
Series Statement:
Working Paper
2009-30




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

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