Podcast NOVAFRICA: Liquidity constraints and capital allocation in Uganda

O Episódio 4 da  5ª Temporada do NOVAFRICA Sustainable Development Talks foi gravado com Konrad Burchardi, da Stockholm School of Economics.
O nosso convidado falou acerca do seu artigo entitulado “Liquidity constraints and capital allocation in Uganda “.

Resumo:
Agricultural productivity in Sub-Saharan Africa has been largely stagnant over the past half century. The lack of progress is often attributed to the lack of adoption of modern inputs, such as chemical fertilisers and hybrid seeds. We conducted an experiment designed to uncover the efficiency of the market mechanism at allocating chemical fertilisers to farmers. We find that average returns to fertiliser amongst non-adopters are low, but there is a group of farmers with high returns who would be induced to adopt fertiliser with a mild subsidy. In that sense we find the market for fertiliser to be inefficient, and we calculate the optimal subsidy to be 30% of the market price. Further, we show that this inefficiency is driven by the liquidity constraints: once liquidity constraints are removed, the optimal subsidy is 0.