Incentives Embedded in Institutions: The Case of Share Contracts in Ghanaian Cocoa Production

Providing price incentives to farmers is usually considered essential for agricultural development. Although such incentives are important, regarding price as the sole explanatory factor is far from satisfactory in understanding the complex realities of agricultural production in Africa. By analyzing the share contracts widely practiced in Ghana, this article argues that local institutions such as land tenure systems and agrarian contracts provide strong incentives and disincentives for agricultural production. Based on data derived from fieldwork in the 1990s, the study analyzes two types of share contracts and the incentive structures embedded in them. The analysis reveals that farmers' investment behavior needs to be understood in terms of both short-term incentive to increase yield and long-term incentive to strengthen land rights. The study concludes that the role of price incentives in agricultural production needs to be reconsidered by placing it in wider incentive structures embedded in local institutions.

Influence of Social Institutions on Inequality in China

This study analyses the impact of changes in social institutions, i.e. in the informal and formal social security system, on income inequality in China. This study uses an inequality decomposition analysis approach comparing household survey data for 1988 with 1995.Three main results emerge from the analysis: first, it findsthat the family based social security is losing its importance mainly through the changes in employment pattern in a household. This change contributes to rising income inequality. Second, thestudy shows that the introduction of new formal social security system helped to equalise the distribution of retired household members' income in urban areas in 1995. Third, however, these changes have only benefited a restricted number of persons. Benefits for rural migrants are low and most of the rural population has still no access to the new system.

Politics of the 1945 Constitution:Democratization and Its Impact on Political Institutions in Indonesia

Introduction : Before 1998, no one could think about the amendment of the 1945 Constitution. The 1945 Constitution was a product of nationalist who had hard fought for independence from the Dutch colonization. This historical background made it the symbol of independence of the Indonesian nation. Thus, it has been considered as forbidden to touch contents of the 1945 Constitution whereas political leaders have legitimized their authoritarian rulership by utilizing a symbolic character of the Constitution. With the largest political turmoil since its independence, that is, a breakdown of authoritarian regime and democratic transformation in 1998-1999, however, a myth of the "sacred and inviolable" constitution has disappeared. A new theme has then aroused: how can the 1945 Constitution be adapted for a new democratic regime in Indonesia? 　　　The Indonesian modern state has applied the 1945 Constitution as the basic law since its independence in 1945, except for around 10 years in the 1950s. In the period of independence struggle, contrary to the constitutional provision that a kind of presidential system is employed, a cabinet responsible for the Central National Committee was installed. Politics under this institution was in practice a parliamentary system of government. After the Dutch transferred sovereignty to Indonesia in 1949, West European constitutionalism and party politics under a parliamentary system was fully adopted with the introduction of two new constitutions: the 1949 Constitution of Federal Republic of Indonesia and the 1950 Provisional Constitution of Republic of Indonesia. Since a return from the 1950 Constitution to the 1945 Constitution was decided with the Presidential Decree in 1959, the 1945 Constitution had supported two authoritarian regimes of Soekarno's "Guided Democracy" and Soeharto's "New Order" as a legal base. When the 32-year Soeharto's government fell down and democratization started in 1998, the 1945 Constitution was not replaced with a new one, as seen in many other democratizing countries, but successively reformed to adapt itself to a new democratic regime. In the result of four constitutional amendments in 1999-2002, political institutions in Indonesia are experiencing a transformation from an authoritative structure, in which the executive branch monopolized power along with incompetent legislative and judicial branches, to a modern democratic structure, in which the legislative branch can maintain predominance over the executive. However, as observed that President Abdurrahman Wahid, the first president ever elected democratically in Indonesian history, was impeached after one and a half years in office, democratic politics under a new political institution has never been stable. 　　　Under the 1945 Constitution, how did authoritarian regimes maintain stability? Why can a democratic regime not achieve its stability? What did the two constitutional amendments in the process of democratization change? In the first place, how did the political institutions stipulated by the 1945 Constitution come out? Through answering the above questions, this chapter intends to survey the historical continuity and change of political institutions in Indonesia along with the 1945 Constitutions and to analyze impact of regime transformation on political institutions. First, we examine political institutions stipulated by the original 1945 Constitution as well as historical and philosophical origins of the constitution. Second, we search constitutional foundations in the 1945 Constitution that made it possible for Soekarno and Soeharto to establish and maintain authoritarian regimes. Third, we examine contents of constitutional amendments in the process of democratization since 1998. Fourth, we analyze new political dynamics caused by constitutional changes, looking at the impeachment process of President Abdurrahman Wahid. Finally, we consider tasks faced by Indonesia that seeks to establish a stable democracy.

Political institutions and policy outcomes : effects of presidential vetoes on budget making

The article examines how the power distribution between the executive and the legislature under the Presidential system affects policy outcomes. We focus in particular on the presidential veto, both package and partial. Using a simple game theory model, we show that the presidential partial veto generally yields a result in favor of the President, but that such effects vary depending on the reversion points of the package veto and the Congress's possible use of sanctions against the President. The effects of the Presidential partial veto diminish if the reversion point meets certain conditions, or if the Congress has no power to impose sufficient sanctions on the President when the President revises the outcome ex-post. To clarify and explain the model, we present the case of budget making in the Philippines between 1994 and 2008. In the Philippines, the presidential partial veto has been bringing expenditure programs closer to the President's ideal point within what may be called the Congress's indifference curve. The Congress, however, has not always passed budget bills and from time to time has carried over the previous year's budget, in years when the budget deficit increased. This is the situation that the policy makers cannot retrieve from the reversion point.

Performance of financial institutions in Bhutan

The Kingdom of Bhutan is a small landlocked country in South Asia, located in the eastern Himalayas, and bordered by India and China. Bhutan is a small and fragile economy with a population of about 687,000. Nevertheless, its banking system plays an essential role in the growth and development of the country. This paper analyzes the financial performance, the development and growth of bank and non-bank financial institutions of Bhutan for the period 1999-2008 using both traditional and data envelopment analysis (DEA). The DEA analysis shows that financial institutions in are efficient and Bhutan National Bank has been the most efficient one. Overall, the paper finds that the ROE of the financial institutions in Bhutan are comparable to the international banks.

The asset/liability structure of the Philippine banks and non-bank financial institutions in 2000s : a preliminary study for financial access analyses

Based on the consolidated statements data of the universal/commercial banks (UKbank) and non-bank financial institutions with quasi-banking licenses, this paper presents a keen necessity of obtaining data in detail on both sides (assets and liabilities) of their financial conditions and further analyses. Those would bring more adequate assessments on the Philippine financial system, especially with regard to each financial subsector's financing/lending preferences and behavior. The paper also presents a possibility that the skewed locational and operational distribution exists in the non-UKbank financial subsectors. It suggests there may be a significant deviation from the authorities' (the BSP, SEC and others) intended/anticipated financial system in the banking/non-bank financial institutions' real operations.

Impacts of tertiary canal irrigation -- impact evaluation of an infrastructure project

We estimate the economic impacts of irrigation using the panel data set from rural Thailand. We employed difference-in-differences estimation and showed that tertiary irrigation has unexpected impacts. Contrary to the local experts predicitions that it should have substantial productivity impacts as it allows better water controls for farmers, we found largely zero profitability impacts. Another unexpected finding is that, while profitability is not affected, we see an increase in cultivation probability with the construction of tertiary canals. This is observed in both wet and dry seasons. This finding suggests that Thai farmers are willing to expand operation scale once they get water.

Diffuse Soil Co2 Flux To Assess The Reliability Of Co2 Storage In The Mazarrón-Gañuelas Tertiary Basin (Spain)

Geological storage of CO2 is nowadays internationally considered as the most effective method for greenhouse gas emission mitigation, in order to minimize its effects on the global climatology. One of the main options is to store the CO2 in deep saline aquifers at more than 800 m depth, because it achieves its supercritical state. Among the most important aspects concerning the performance assessment of a deep CO2 geological repository is the evaluation of the CO2 leakage rate from the chosen storage geological formation. Therefore, it is absolutely necessary to increase the knowledge on the interaction among CO2, storage and sealing formations, as well as on the flow paths for CO2 and the physico-mechanical resistance of the sealing formation. Furthermore, the quantification of the CO2 leakage rate is essential to evaluate its effects on the environment. One way to achieve this objective is to study of CO2 leakage on natural analogue systems, because they can provide useful information about the natural performance of the CO2, which can be applied to an artificial CO2 geological storage. This work is focused on the retention capacity of the cap-rock by measuring the diffuse soil CO2 flux in a site selected based on: i) the presence of a natural and deep CO2 accumulation; ii) its structural geological characteristics; and iii) the nature of the cap-rocks. This site is located in the so-called Mazarrón-Gañuelas Tertiary Basin, in the Guadalentin Valley, province of Murcia (Spain) Therefore the main objective of this investigation has been to detect the possible leakages of CO2 from a deep saline aquifer to the surface in order to understand the capability of this area as a natural analogue for Carbon Capture and Sequestration (CCS). The results obtained allow to conclude that the geological sealing formation of the basin seems to be appropriate to avoid CO2 leakages from the storage formation.

Effects on the shallow aquifers by CO2 leakages in a tertiary basin (province of Murcia, Spain)

Geological storage of CO2 is nowadays internationally considered as the most effective method for greenhouse gas emission mitigation, in order to minimize its effects on the global climatology. One of the main options is to store CO2 in deep saline aquifers at more than 800m depth, because it reaches its supercritical state. Study of the CO2 natural accumulations as natural analogues of an artificial CO2 storage is very useful in order to understand the CO2 long term behaviour and thus to predict its possible impact on the surficial environment and life. Therefore the main objective of this work is to detect the affection of the CO2 leakages from a deep saline aquifer on the shallow aquifers, all of them located in the Gañuelas-Mazarrón Tertiary basin (Province of Murcia, Spain). This CO2 storage and leakage natural system can be analogous to an artificial CO2 storage with leakage phenomena. In order to reach these objectives, groundwaters from different aquifers in the site have been sampled and analysed for major elements, free and dissolved gases and stable isotopes, particularly ∂ 13 C and 3 He/ 4 He. The results obtained allow to conclude that this natural system is an interesting example of natural analogue for an artificial CO2 storage affected by leakage processes because the shallow fresh aquifers in the site are polluted by CO2 from the deep saline aquifer as a consequence of an intensive over-exploitation of these freshwater aquifers

Grid-connected roof solar plants in educational institutions for testing and electricity generation: a case in Spain.

The use of photovoltaic experimental plants in engineering educational buildings contributes to an increase in acceptance of this technology by future engineers. There are some photovoltaic (PV) systems in educational buildings in Spain, but they are usually limited to buildings in relation to electrical technologies or research areas. They are not common in other educational or official buildings. This paper presents the project of a grid-connected solar plant with two main objectives. First, different PV module technologies will be compared. Second, an emphasis on agronomical areas in educational settings will be reviewed in an attempt to facilitate student engagement in the use of the power plant. The system is grid-connected in order to pay-back the investment in the plant. In fact the electricity generated by the plant will be used by the installations of the building, as it is the closest consumer. This work intends to approximate photovoltaic technology to university degrees not directly related with it and at the same time research in comparison of systems with different technologies. This is a good example of an solar plant for both optimum production and educational purposes.

Risk sharing with Multilateral Financial Institutions in infrastructure and energy project financing : effect on capital relief for commercial banks

(Matsukawa and Habeck, 2007) analyse the main instruments for risk mitigation in infrastructure financing with Multilateral Financial Institutions (MFIs). Their review coincided with the global financial crisis of 2007-08, and is highly relevant in current times considering the sovereign debt crisis, the lack of available capital and the increases in bank regulation in Western economies. The current macroeconomic environment has seen a slowdown in the level of finance for infrastructure projects, as they pose a higher credit risk given their requirements for long term investments. The rationale for this work is to look for innovative solutions that are focused on the credit risk mitigation of infrastructure and energy projects whilst optimizing the economic capital allocation for commercial banks. This objective is achieved through risk-sharing with MFIs and looking for capital relief in project finance transactions. This research finds out the answer to the main question: "What is the impact of risk-sharing with MFIs on project finance transactions to increase their efficiency and viability?", and is developed from the perspective of a commercial bank assessing the economic capital used and analysing the relevant variables for it: Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). An overview of project finance for the infrastructure and energy sectors in terms of the volume of transactions worldwide is outlined, along with a summary of risk-sharing financing with MFIs. A review of the current regulatory framework beneath risk-sharing in structured finance with MFIs is also analysed. From here, the impact of risk-sharing and the diversification effect in infrastructure and energy projects is assessed, from the perspective of economic capital allocation for a commercial bank. CreditMetrics (J. P. Morgan, 1997) is applied over an existing well diversified portfolio of project finance infrastructure and energy investments, working with the main risk capital measures: economic capital, RAROC, and EVA. The conclusions of this research show that economic capital allocation on a portfolio of project finance along with risk-sharing with MFIs have a huge impact on capital relief whilst increasing performance profitability for commercial banks. There is an outstanding diversification effect due to the portfolio, which is combined with risk mitigation and an improvement in recovery rates through Partial Credit Guarantees issued by MFIs. A stress test scenario analysis is applied to the current assumptions and credit risk model, considering a downgrade in the rating for the commercial bank (lender) and an increase of default in emerging countries, presenting a direct impact on economic capital, through an increase in expected loss and a decrease in performance profitability. Getting capital relief through risk-sharing makes it more viable for commercial banks to finance infrastructure and energy projects, with the beneficial effect of a direct impact of these investments on GDP growth and employment. The main contribution of this work is to promote a strategic economic capital allocation in infrastructure and energy financing through innovative risk-sharing with MFIs and economic pricing to create economic value added for banks, and to allow the financing of more infrastructure and energy projects. This work suggests several topics for further research in relation to issues analysed. (Matsukawa and Habeck, 2007) analizan los principales instrumentos de mitigación de riesgos en las Instituciones Financieras Multilaterales (IFMs) para la financiación de infraestructuras. Su presentación coincidió con el inicio de la crisis financiera en Agosto de 2007, y sus consecuencias persisten en la actualidad, destacando la deuda soberana en economías desarrolladas y los problemas capitalización de los bancos. Este entorno macroeconómico ha ralentizado la financiación de proyectos de infraestructuras. El actual trabajo de investigación tiene su motivación en la búsqueda de soluciones para la financiación de proyectos de infraestructuras y de energía, mitigando los riesgos inherentes, con el objeto de reducir el consumo de capital económico en los bancos financiadores. Este objetivo se alcanza compartiendo el riesgo de la financiación con IFMs, a través de estructuras de risk-sharing. La investigación responde la pregunta: "Cuál es el impacto de risk-sharing con IFMs, en la financiación de proyectos para aumentar su eficiencia y viabilidad?". El trabajo se desarrolla desde el enfoque de un banco comercial, estimando el consumo de capital económico en la financiación de proyectos y analizando las principales variables del riesgo de crédito, Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). La investigación presenta las cifras globales de Project Finance en los sectores de infraestructuras y de energía, y analiza el marco regulatorio internacional en relación al consumo de capital económico en la financiación de proyectos en los que participan IFMs. A continuación, el trabajo modeliza una cartera real, bien diversificada, de Project Finance de infraestructuras y de energía, aplicando la metodología CreditMet- rics (J. P. Morgan, 1997). Su objeto es estimar el consumo de capital económico y la rentabilidad de la cartera de proyectos a través del RAROC y EVA. La modelización permite estimar el efecto diversificación y la liberación de capital económico consecuencia del risk-sharing. Los resultados muestran el enorme impacto del efecto diversificación de la cartera, así como de las garantías parciales de las IFMs que mitigan riesgos, mejoran el recovery rate de los proyectos y reducen el consumo de capital económico para el banco comercial, mientras aumentan la rentabilidad, RAROC, y crean valor económico, EVA. En escenarios económicos de inestabilidad, empeoramiento del rating de los bancos, aumentos de default en los proyectos y de correlación en las carteras, hay un impacto directo en el capital económico y en la pérdida de rentabilidad. La liberación de capital económico, como se plantea en la presente investigación, permitirá financiar más proyectos de infraestructuras y de energía, lo que repercutirá en un mayor crecimiento económico y creación de empleo. La principal contribución de este trabajo es promover la gestión activa del capital económico en la financiación de infraestructuras y de proyectos energéticos, a través de estructuras innovadoras de risk-sharing con IFMs y de creación de valor económico en los bancos comerciales, lo que mejoraría su eficiencia y capitalización. La aportación metodológica del trabajo se convierte por su originalidad en una contribución, que sugiere y facilita nuevas líneas de investigación académica en las principales variables del riesgo de crédito que afectan al capital económico en la financiación de proyectos.