Economics, institutions, development, and trade: Analysis of the Malian cotton sector

Cotton is the source of livelihood for millions of rural households and an important source of export revenue for many West African countries. Correspondingly, cotton is vital to efforts related to economic and social development in the region. In the late 1990's, Mali and other West African countries initiated reform measures to privatize and liberalize segments of their cotton sectors, with the goal of rendering them more efficient. Previous research examined relationships between changes in market structure (i.e., monopoly versus competitive market) and cotton sector performance (i.e., prices and production). Comparatively little research has analyzed the interaction between institutional arrangements (i.e., formal and informal rules affecting date of payment and access to fertilizers and pesticides) and economic performance of cotton sectors.;Using the Malian cotton sector as a case study, this research contributes to the existing literature by 1) exploring how the evolution of institutional arrangements has influenced economic performance and 2) estimating their effects. First, a cotton producers' supply response to price and non-pecuniary factors is assessed using a fixed effect estimator. Results suggest that institutional constraints, such as low credit recovery rates and delays in payment to farmers, have significantly impacted cotton acreage and production in Mali over the last decade. Second, technical efficiency scores of cotton producers in Benin, Burkina Faso, and Mali are estimated using a stochastic frontier production model. Results provide insights regarding the performance of West African cotton producers relative to differences in local market structures and institutional realities. Finally, the evolution of institutions and their (un)intended consequences on economic performance in the Malian cotton sector is examined using John R. Commons' framework. From the analysis, low cotton prices, delays in payment, indebtedness, inadequate access to cereal inputs and extension services, and lack of adequate communication between farmers and their union' leaders appear to be key limiting factors to further economic benefits.;Throughout this study, it is demonstrated qualitatively and quantitatively that institutions do matter. This finding provides empirical support for the following conclusion: policy reforms that ignore institutions and institutional reforms may result in limited levels of success in terms of economic development. (Full text of this dissertation may be available via the University of Florida Libraries web site. Please check http://www.uflib.ufl.edu/etd.html)...