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This article argues that the structure of the Vietnamese rice export system is, in political economy terms, a rational response to the volatility present in the international rice market. In particular, it is argued that the Vietnamese Food Agency, along with VINAFOOD-1 and VINAFOOD-2, have been structured so that they can benefit from the domestic demands for export restrictions anticipated to occur as a consequence of international price volatility and the psychological demand of consumers for price stability. In turn, the actions of these agencies also contribute to international price volatility and the resulting demand for export restrictions. Since the political and economic elite in Vietnam obtain both political and economic power from this system, it is unlikely to be replaced with more effective and efficient policies to combat domestic price volatility. Thus, continued volatility in the price of rice can be expected.

Akerlof’s “Lemons” paper provides a seminal economic result suggesting that, in markets with asymmetric information where product quality is unobservable by consumers prior to purchase and use, the introduction of a low-quality product will drive its higher quality counterpart(s) out of the market. In this paper we identify some empirically relevant cases/conditions under which the introduction of a low-quality product does not drive its higher quality substitutes out of the market but, instead, ends-up coexisting with them.

This paper develops a model of heterogeneous individuals to analyze the interacting horizon and free-rider problems faced by cooperative organizations. Analytical results identify the conditions under which a cooperative will form despite these property rights problems and show that (i) differences in members' time horizons need not necessarily lead to short-term cooperative investments and (ii) free riding is not always a problem for cooperatives. The analysis also shows how a cooperative can use a membership fee to address these property rights problems and provides additional insights into the relationship between a cooperative's cost structure and membership fees.

Cooperatives are of particular interest to economists because of their unique ownership structure and the incentives this structure creates. In addition to the so-called property rights problems (e.g., freerider, horizon, and portfolio problems), the analysis of agricultural cooperatives has focused on issues of market power, agency, product quality, and increasingly producer and consumer heterogeneity. These last three elements are important features of the industrialization of the agrifood system. This article highlights the key concepts required for examination of cooperatives now and in the future and incorporates these concepts into a framework that can be used to examine the myriad situations and problem settings in which agricultural cooperatives are likely to be found. A key finding of the paper is that the procompetitive and distributional impacts of cooperatives depend critically on the sensitivity of price in the downstream retail market, the nature of the cooperative's governance structure, and the open or closed nature of cooperative membership. The article also provides a discussion of new areas in which an understanding of cooperatives and collective action would be valuable, as well as a discussion of the applicability of the proposed framework to these areas.

The purpose of this paper is to provide a procedure for examining the extent to which the changes observed among post-communist countries are consistent with a dynamic determined by the relative power of the state versus the relative power of society as captured in Acemoglu and Robinson’s “narrow corridor” framework. A direct test of Acemoglu and Robinson’s theory is not possible because the available data measures the quality of government and not the underlying state and society power. However, estimates of these latent variables can be obtained with factor analysis and the calculation of factor scores, which are then used in a cluster analysis to group countries according to their estimated state and society power. The results of the cluster analysis show three distinct groups of post-communist countries; these groups are argued to have the characteristics of the Despotic Leviathan, the Paper Leviathan and the Shackled Leviathan. While we find support for Acemoglu and Robinson’s prediction that the Despotic Leviathan acts as an attractor, the other predicted attractor – the Absent Leviathan – is not found in the data. Instead, countries with low state and society power appear to be trapped in the Paper Leviathan group, thus suggesting that it may also be an attractor. As predicted, membership in the Shackled Leviathan is stable only if state and society power are both large and relatively balanced. A closer analysis of three countries – Russia (Despotic Leviathan), Albania (Paper Leviathan), and Hungary (unable to secure a place in the “narrow corridor”) – provides additional evidence that largely supports the use of factor and cluster analysis to categorize countries.

The development of voluntary certification schemes in areas as diverse as fish, coffee and forestry offer the promise of environmental improvements without the requirement of governmental regulation and intervention. In many cases, however, the costs to landholders of making the transition are too large for them to do so. At the same time, the large intermediaries appear to have little economic incentive to introduce certification because the market does not adequately value the environmental benefits. Instead, NGOs and other aid and development agencies who would like to see small producers benefit from the change in production practices have typically stepped in to provide financial support for certification. This paper shows how voluntary price discrimination (in the form of donations) by the consumers that most highly value certification can be used to finance a switch to environmentally sustainable practices and thus address a market failure. This analysis shows that an NGO’s optimal intervention depends on the size of its budget, the elasticity of supply of the product, and the elasticity of participation by producers. NGOs with smaller budgets rely more heavily on lump sum transfers to the intermediary and less heavily on volume and participation-dependent subsidies. Volume and participation dependent subsidies are inversely related to the elasticity of supply and the elasticity of participation in a standard Lerner relationship.

The purpose of this article is to examine the system-wide effects of the introduction of genetically modified (GM) products with and without labeling and to compare these two regimes to a third regime where GM products are not present either because they have not yet been developed or because they have been banned. For each regime, the decisions and welfare of consumers, producers, and life science companies are examined. The article explicitly incorporates the consumer response to the introduction of GM technology and considers different market structures of the life science sector.

This article develops a sequential game-theoretic model of heterogeneous producers to examine the market and welfare effects of cooperative involvement in process innovation activity in the agricultural sector. The analysis examines an open-membership, input-supplying cooperative (co-op) that maximizes member welfare and finances its innovation activity through retained earnings. Analytical results show that the presence of the co-op can increase the arrival rate of innovations while reducing the price of agricultural inputs. Cooperative involvement in innovation activity can thus be welfare enhancing and socially desirable with its effectiveness being determined by the degree of producer heterogeneity and the size of innovation costs.

This article examines the optimal two-part pricing by an intermediary in a carbon offset market. In addition to creating a framework for analyzing carbon offset pricing, this article makes two contributions to the theoretical literature. First, we provide an in-depth examination of the roles played by the upstream inframarginal supply and participation elasticities and the downstream demand elasticity in determining the optimal two-part pricing strategy. Second, we compare the pricing decisions of three different organizational types: a for-profit firm, a public agency, and a producer association. The producer association problem, which has received little attention in the literature, yields counterintuitive results because a producer association must simultaneously reduce output and distribute all profits back to its members.