Ownership and Productive Efficiency: Evidence from Estonia

Privatization in Estonia has produced varied ownership configurations. This enables hypotheses on the productivity effects of different ownership forms to be tested. Findings are based on fixed-effects production function models and are estimated using a large, random sample of firms. Depending on the particular specification (and relative to state ownership), (i) private ownership is 13–22% more efficient; and (ii) all types of private ownership are more productive, though managerial ownership has the biggest effects (21–32%) and ownership by domestic outsiders has the smallest impact (0–15%). The joint hypothesis that privatization coefficients are equal is rejected. Findings are robust with respect to choice of technology and the use of instrumental variable estimates. These results provide only partial support for the standard theory of privatization, but stronger support for theorists who argue that some forms of insider ownership may constitute preferable forms of corporate governance in some circumstances.     

Shared Sectoral Growth Versus the Dual Economy Model: Evidence from Côte d'Ivoire,Ghana, and Zimbabwe

Abstract: Though recently challenged, the dual economy view has affected development economics and development policy, either explicitly or implicitly, for more than half a century. According to this view, agriculture merely serves to build the industrial sector — in particular, agriculture has no role as an engine of growth in the long term. Examining agriculture, industry and service sector growth in Côte d'Ivoire, Ghana, and Zimbabwe over more than three decades, we find little empirical support for this view. On the contrary, our analyses find a large degree of interdependence in long‐run sectoral growth, implying that the sectors ‘grow together’ or, similarly, that there are externalities or spillovers between sectors. Policy implications are also discussed; these include directing more attention towards the interdependencies in sectoral growth broadly defined. In particular, our findings have implications for the design of education and health programs, as well. This improved understanding of inter‐sectoral dynamics at all levels may facilitate policy implementation aimed at increasing economic growth — and thereby ultimately improving peoples' livelihoods — in Africa and elsewhere.     

Land and contract farming: Changes in the distribution and meanings of land in Kilombero,Tanzania

In the context of contract farming of sugarcane in an outgrower scheme in Tanzania, this paper explores how the scheme has fundamentally altered people's relationships with the land over the last 50 years, in particular, since 1999, when, after three decades, the sugar parastatal was privatized. The paper reviews the literature on the mutual relationship between contract farming and land ownership and examines the scheme with a focus on long-term changes in the forms of land acquisitions and land use. We argue that the meaning and importance of landownership in contract farming schemes needs to be reassessed if participation in contract farming entails a departure from previous forms of acquiring land, generates new spatial patterns of agricultural production, and necessitates additional economic and social resources in order to transform land into an economic asset.     

Why Did Europe Decide to Move to a Single Currency 25 Years Ago?

Many Europeans today ask why the European Community chose the bold strategy of pursuing an Economic and Monetary Union at a time when a number of political and economic issues had not yet been resolved. Many economists like to think that the economic case for EMU was weak and that the decision was taken strictly on political grounds. As someone who had the privilege of being involved in the early preparatory efforts, I would argue that this is a misreading of history. I believe there was both a strong economic case for moving towards a single currency and a rare political opportunity for implementing it around 1990.