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Government Market Intervention African Governments (AG) intervention Intervention promotes inefficiency
Food crops and Cash (Export) Crops Sale Export crops: State-controlled marketing channels State owned body: Marketing Board (MB)
Stabilization becomes Taxation Revenue MB of AG’s: Used for Price Stabilization However committing money to farmers benefits short-lived Over born ambitions for development
Commitment diversion > non-agricultural sectors Stabilization becomes Taxation
Intervening continues AG’s intervene in Food crop market Price controls Projects: constant focus on increasing food production Non-bureaucratic intervention: -> Domestic currency overvaluation
Development Economics Rejection of Development Economics Approach to Governmental behavior Pressure on decision making: Domestic forces Low in international hierarchy
Governments not just act in public interest
Why? Low-prices, inefficient policies, etc. Better policies available E.g.: Offer higher prices for food, invest resources more appropriately It raises a Question: Why continue? Will for rapid industrialization? Pluralist theory? Low priced food: Ease relations with urban constituents
Retaining power Pluralist explanation incomplete Another approach needed
Organizing Rural constituency Disorganizing Rural Opposition
Markets: Instruments of Political Organization