between government and university researchers frequently seen in many developing areas
inhibits local research solutions to contemporary policy problems.
The ability of ongoing local research to inform policy in a timely way is illustrated by the
government of Rwanda's decision to not implement an intended support price policy for
beans after research results indicated that most Rwandan farmers were net bean buyers
and that much of the local bean supply was imported informally from neighboring
countries (Loveridge 1991). The generation of demand-driven policy analysis has been
illustrated in Zimbabwe by President Mugabe's call for analysis on how to expand the role
of small-scale maize mills, largely in response to applied research within the government
and at the University of Zimbabwe.
• Importance of beliefs and ideology in affecting economic performance. Peoples’
subjective experiences shape how they see the world. Persistent views of private
marketing agents as exploitative or uninterested in responding to liberalization have
contributed in some countries to a “chicken and egg” dilemma, in which traders are
reluctant to invest further in the marketing system for fear of government intervention in
storage and pricing. Governments are reluctant to withdraw from the market for fear that
the private sector will not respond to adequately stabilize the system. Maize trade in
Kenya has featured a policy of legalized private cross-border trade, followed by an import
ban, an export ban, and now an import duty over the span of three years. The stability and
predictability of the policy environment are largely shaped by societal perceptions about
the role and function of private trade: is taking advantage of spatial and temporal price
differences an acceptable role for traders, or is this a provocation to government that
works against state policy?
Of fundamental importance are the societal beliefs about the legitimacy of the economic
and political institutions. What holds a democracy together is a general belief that the
system is legitimate and in some sense fair and open to change. This belief follows from
socialization. The critical problem in many developing countries is that the losers of
political decisions decide to opt out of the system (Hirschman 1970). The transfer of
government control is not accepted. Those who are losers want to set up their own
system. But fighting over the distribution of wealth destroys the wealth.
Education may be an essential factor in a large complex political economy. Whether the
majority of society believes that (a) the role of government is to serve the people, or (b)
that winning control of the government is a means for channeling income to particular
groups is determined by education and socialization as well as history (which is always
interpreted through the lens of socialization).
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