@article{Chowdhury:59597,
      recid = {59597},
      author = {Chowdhury, Shyamal K. and Negassa, Asfaw and Torero,  Maximo},
      title = {Market Institutions: Enhancing the Value of Rural-Urban  Links},
      address = {2005-10},
      number = {583-2016-39603},
      series = {FCND Discussion Paper 195},
      pages = {58},
      year = {2005},
      abstract = {This paper examines how market institutions can affect  links between urban and
rural areas with specific emphasis  on goods market integration in the national  context.
Traditionally, development researchers and  practitioners have focused either on rural
market  development or on urban market development without  considering the
interdependencies and synergies between the  two. However, more than ever before,
emerging local and  global patterns such as the modern food value-chain led  by
supermarkets and food processors, rapid urbanization,  changes in dietary composition,
and enhanced information  and communication technologies point to the need to pay  close
attention to the role of markets both in linking  rural areas with intermediate cities and
market towns and  promotion of economic development and poverty  reduction.
This paper begins with a presentation of a  conceptual framework of market
integration and then  identifies five major factors that increase the transfer  costs that
subsequently hinder market integration between  rural and urban areas: information
asymmetry, transaction  costs, transport and communication costs, policy  induced
barriers, and social and noneconomic factors. Five  specific cases in five developing
countries are examined in  this study to demonstrate the primary sources of transfer  costs
and the aspects of market institutions that are  important to market integration and
promotion of  rural-urban linkages.
While emerging institutions such as  modern intermediaries linked to supermarkets
and food  processors can reduce information asymmetries between rural  producers and
urban consumers, existing institutions such  as producers’ cooperatives can pool the risks,
increase the  bargaining power of small producers, reduce enforcement  costs, and thereby
reduce transaction costs. In addition,  new types of partnerships between businesses and
NGOs, and  between public and private sectors, can improve  infrastructure provision
which, in turn, can reduce  transport and communication costs. To the contrary,  the
presence of inappropriate policies or noneconomic  factors such as those that involve
social exclusion take on  a negative role in linking urban and rural markets.},
      url = {http://ageconsearch.umn.edu/record/59597},
      doi = {https://doi.org/10.22004/ag.econ.59597},
}