Economics Research Institute Study Paper
Utah State University Department of Economics
Decontrol of commercial food marketing channels was widely expected to induce massive trader entry and engender more competitive, efficient markets in Africa. Despite strong empirical evidence of trader entry, enterprise expansion is proving difficult and many market observers and participants claim market power continues, ifperhaps exercised now by private traders instead of public enterprises. This paper uses the industrial organization concept of mobility barriers to confront this puzzle of substantial market entry that might not enliven market competition. Primary data from a survey of food marketing intermediaries in Madagascar reveal distinct groups within rural food marketing channels, separated by identifiable mobility barriers. Entry has thus been largely limited to a few particular niches. Moreover, the place individuals occupy within the complex matrix of rural food marketing activities is defined largely by one's a priori social identity. As a result, the experience and subjective perceptions of food marketing liberalization vary significantly across socially distinct subpopulations.
Barrett, Christopher B., "Mobility Barriers and the Socially Differentiated Effects of Food Marketing Liberalization in Madagascar" (1996). Economic Research Institute Study Papers. Paper 78.