Faculty of Natural and Agricultural Sciences
School of Agricultural and Food Sciences
Department of Agricultural Economics, Extension and Rural Development
Selected Highlights from Research Findings
The new institutional economics (NIE), as an important and growing school of thought in Economics, questions the basic assumptions of neoclassical and mainstream economics. The specific focus and contribution of NIE arises from its recognition, firstly, that economic actors face a particular problem as a result of imperfect information about the behaviour of other actors in transactions and, secondly, that institutions play an important role in addressing these problems. This recognition demands explicit attention to the ways that actors and societies address problems arising from imperfect information in transactions. This school of thought of the economics discipline provides a useful framework to study the problems of agricultural development in Africa.
It is in this context that Prof Johann Kirsten recently completed a book on the applications of new institutional economics in agricultural development. The book, Institutional economics perspectives on Africa's agricultural development, represents an effort to consolidate lessons learnt from applying an “institutional lens” to the agricultural development challenges of Africa. It presents a framework for thinking about the institutional challenges facing African agriculture, as well as the tools of economics analysis that can be used to address them. The combination of theoretical chapters on core themes, supported by case studies from a wide range of countries, makes an important contribution to existing literature, with an accessible synthesis of new institutional economics theory and research around the theme of understanding and improving African agriculture.
The focus throughout is on sub-Saharan Africa (especially eastern and southern Africa), and on policies and institutions affecting smallholder agriculture, which reflect their predominance. The book's focus on institutional issues is not at the expense of related and essential complements to institutional change, such as infrastructural development or technical change. Explicit attention to institutions is warranted, however, for two reasons. Firstly, there has been too little analysis of institutional processes and constraints in agricultural development in the past. Secondly, institutional change is often a prerequisite for effective investment in infrastructural and technical change.
The book addresses a number of policy issues that are highly relevant to African agriculture. The current juxtaposition of market challenges in smallholder African food systems and in global commodity and financial systems demands more nuanced understanding of the functioning of markets for different commodities and services in different political, cultural and economic situations. The material in this volume provides essential skills for development practitioners, policy makers and graduate students working, or intending to work, in these fields.
Contact person: Prof JF Kirsten.
This research applied an economic impact assessment approach that captures farmer adaptations to varying environmental factors to analyse the impact of climate change on crop farming in Ethiopia, based on data from farm households in different agro-ecological zones of the county. The seasonal marginal impact analysis indicates that marginally increasing temperature during summer and winter would significantly reduce crop net revenue per hectare, whereas marginally increasing precipitation during spring would significantly increase net crop revenue per hectare. Moreover, the net crop revenue impact of predicted climate scenarios from three climate circulation models (CGM2, HaDCM3 and PCM) for the years 2050 and 2100 showed that reduction in net revenue per hectare by the year 2100 would be more than the reduction by the year 2050, indicating that the damage climate change would pose will increase with time unless this negative impact is abated through adaptation. Additionally, results show that the net revenue impact of climate change is not uniformly distributed across the different agro-ecological zones of Ethiopia.
Contact person: Prof RM Hassan.
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