Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110724
Authors: 
Shimeles, Abebe
Gurara, Daniel Zerfu
Birhanu Tessema, Dawit
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8998
Abstract: 
We examine the fertilizer retail-import price gap in 14 African countries between 2002 and 2013. This price differential is large and remains persistent even after accounting for changes in the cost of domestic transportation. We hypothesize that these persistent deviations may be indicative of market power by importers/suppliers granted to them by governments that are prepared to bar competition in exchange for political rent. Our results show that the retail-import price differential is negatively correlated with government effectiveness. Quality of institutions both in terms of executing public policy and delivering services is, on average, likely to affect retail-import price gaps. Overall, our understanding of market imperfections is enhanced by a closer examination of the role of governance and regulation. The study illustrates this by establishing a link between retail-import price differentials and market efficiency and the quality of regulatory environment in Africa.
Subjects: 
market distortions
political rent
JEL: 
D43
O12
Document Type: 
Working Paper

Files in This Item:
File
Size
659.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.