More Evidence Psychological Constraints Matter

A really nice article, recently published in the journal Food Policy, just crossed my desk… erm… email inbox. “Explaining the Performance of Contract Farming in Ghana: The Role of Self-Efficacy and Social Capital” (pay-wall, sorry).

Contract farming is the practice of extending business agreements between suppliers (i.e. smallholder farmers) and buyers (i.e. supermarkets, food processors, or exporters). The practice is often promoted as a tool for poverty alleviation and rural agricultural development, but the benefits relative to the costs of contract farming are far from consistent across time and space. The question central to this paper is what explains these differences in the performance of contract farming?

Here are some highlights from the paper:

  • The authors suggest culture matters! Yeah, that’s right. BREAKING NEWS: Economists concede culture matters! They investigate how much historical events explain cultural differences among pineapple farmers.
  • The historical events that the authors focus on the presence of cocoa cooperatives and Christian missionary schools, both established via the British colonial period.
  • Next the authors make the claim that cocoa cooperatives and Christian missionary schools have shaped the levels of self-efficacy and social capital of individuals within Ghana’s population and that (and here’s the punch line) that these levels of self-efficacy and social capital have been sustained throughout history and still represent important implications today.
  • They find that culture does matter, specifically along two cultural traits: self-efficacy and social capital.
  • The authors suggest that policies that ignore this reality, could lead to unrealistic expectations and predictions of policymakers and thus could lead to inefficiency in achieving policy goals or unintended consequences of the policy itself.

I think this paper is cool for a number of reasons. I’ll just briefly mention two:

First, self-efficacy relates to much of the work I’ve done relating to hope and aspirations. Self-efficacy is a psychological concept that explains an individual’s perceived ability to achieve the goals or aspirations they have set for themselves. Important to economics, self-efficacy influences the way people make decisions about what sorts of investments and non-zero risk choices to make. An individual with a low self-efficacy may not make choices in the way traditional models of choice and behavior within economics may predict.

My work on hope and aspirations, at times, felt a bit crazy. I’d often wonder if my work should even be called ‘economics’. It is reassuring to see other development economists are also thinking about similar topics. The idea that constraints to economic development are not only external and physical, but also internal and psychological is slowly catching on.

Second, in college I spent several months studying in Ghana. I’ve since spent time in other countries that were colonized by the British: namely Kenya and Myanmar. In each of these places, I’ve felt the long-term effects of colonialism. Colonialism brought many things to many countries. Some of them good and some of them bad. What I’ve noticed throughout my travels is that many of the negative impacts of colonialism have lingered. Like a bad smell, even after the source has been removed it remains in the air for some time.

I have a map at my desk at home of the continent of Africa from way back in 1897. It shows how the continent was (arbitrarily) divided up between the world powers at the time. It reminds me of the shared colonial history of much of the modern day developing world. I’ll go out on a limb and say that everyone who studies development knows deep down that this shared colonial history still matters. In development economics at least, this knowledge rarely shows up in many academic studies. It is refreshing to see a study that not only mentions the colonial history of Ghana, but considers it to be a meaningful influence on modern day development policy.

Here is the abstract to the paper:

Self-efficacy is the belief of an individual to have the ability to be successful in a given domain. Social capital is the economic value of a person’s relationships. In the context of this study, self-efficacy is the belief of a farmer to be able to improve her income with contract farming, which increases her actual ability. Social capital increases the ability of the farmers through social support.

We surveyed 400 smallholder pineapple farmers and find that both self-efficacy and social capital are decisive for their successful integration into contract farming. To identify causal effects, we use two instruments, which are also of interest on their own: the historical presence of (1) cocoa cooperatives and (2) Christian missionary schools. During Ghana’s colonial period, the British established cocoa cooperatives, which differed in their performance as a function of biogeographic factors and thus persistently shaped the self-efficacy of the farmers. Roughly at the same time, Christian missionaries established missionary schools, which impacted the traditional societies so that social capital decreased. The finding that self-efficacy and social capital are still shaped by historic variables could indicate that these variables are only slowly changing, or that they only do so in the absence of policy intervention. The latter raises the possibility that effective policies could benefit from strong reinforcing feedbacks once self-efficacy and social capital improve.

We’ll Thank Each Other Later

It has been a while since my last post. I’ve been busy with school, trying to find a job, and spending time with friends. But I had to break the hiatus to share some thoughts on this topic. Last week Calvin College Philosophy professor James K.A. Smith wrote a fascinating article entitled, “You’ll Thank Me Later”: Paternalism and the Common Good. I suggest you give it a read (you will thank me when you’re done … really). For those who think they know what’s best for themselves and ignore my suggestion here is a quick summary:

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Reflections on Returning

It has been just over a month since I’ve returned back to my life here in the States. After spending four months in Ghana through a semester with Calvin College, I am back to life, as I knew it. After living, listening, laughing, and learning in a new country, a new culture, a seemingly new world; I am back to familiarity, friends, and family. The question begs however, am I really back?

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Echad

I was recently asked to speak at faculty devotions held weekly at my former elementary, middle, and high school. I was asked by my mother who teaches first grade at Whitinsville Christian School, and who’s turn to prepare devotions was approaching. The assignment was rigged. Reflect on two passages from scripture: the year long theme verse, Romans 12:5, “…one body, many members…” and the theme verse for December, John 1:14, “The Word became flesh…”, AND share a couple stories from Ghana. Oh yea… there is about a ten minute time limit… The following is about what I said. 

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Reeling in Reality

David Foster Wallace, American writer and essayist, began his commencement address to the graduates of Kenyon College in 2005 with this well known story about fish: One fish says to the other, “So, how’s the water?” The other replied, “What’s water?” The insight and brilliance of this story lies parallel to my experience in Ghana over the past few months. Just as the eyes of a fish are opened to the realities of the world by their experiences—say being caught on a fishing line—my eyes have been opened, my awareness of important issues has been deepened, and my appreciation for other cultures, namely Ghanaian culture, has grown. This has been a time for me to prune away the unnecessary and to add the required aspects of life. I have been challenged to move beyond my simple assumptions of how the world works and have developed a fuller understanding of reality. It turns out the world is much more complicated and nuanced than I ever could have dreamed. Through all this learning I have been humbled. I am smaller and more insignificant than I previously believed. Through all this however, God has ordained and designed this time in my life specifically for me to train and prepare me for a life dedicated to service for the purpose of building His Kingdom.

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Stories from the North

Last week our group returned from spending ten days traveling around the Northern regions of Ghana. Ghana is about the size of Indiana and it took us two days to travel from Accra on the southern coast of Ghana to Tamale the capital of the Northern Region of Ghana. This shows how difficult it can be, at times, to travel on roads here in Ghana. Especially as we moved more and more north the roads became more and more dusty and filled with potholes. We were very busy through the trip visiting several NGOs, (including a day with World Vision) observing the production process of shea butter and pito (beer brewed from millet), and even passing into Burkina Faso for a short time. I thoroughly enjoyed myself during this latest excursion. In fact this may have been my favorite trip I have taken so far in Ghana. I really appreciated the richness of our experiences, the fellowship with our group, and the time away from my ‘normal’ life back in Accra.

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Tro-Troing

Tro-troing is a word I made up. It is a verb that means to ride on tro-tros with no real destination in mind. I did this Saturday afternoon. It was a nice day. I had most of my class assignments under control. I had just spent the entire previous week, including the internship days, in the classroom at the Institute of African Studies. I was feeling a little restless. So I walked down to the Opongolo bus stop and decided to get in the first tro-tro that came my way. I hopped on the old beaten-up bus and learned I was heading to Circle. I had been there once before but had only done marginal exploring so I was happy with my choice, luck, God-ordained-plan; whatever you want to call it.

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(re)Discovering ‘Home’

I spent the previous week away from my usual residence at the University of Ghana, and stayed in the small community of Adenkrebi. Upon returning an interesting thing occurred. When I set foot back into the crazy-busy-crowded-calm of the University of Ghana I felt something comforting. I had spent the last week away from many of the people I had traveled to Ghana with. I was reunited with friends I had not seen in a while. I was back in the midst of familiar surroundings. It is good to be… home?

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A Week in a Village

This past week five of my classmates and I spent a week in the small town of Adenkrobi. Adenkrobi is a community of about 300 people, with many residents working outside the town and living here only on the weekends. The community is about an hour drive north of Accra, but is only about 20 miles away. Roads leading to this community are very difficult to drive on. Daniel, our host for the week owns a van which he graciously toted us to and from the town in. This was a great blessing for us as taxis transporting people to the town cost a premium due to the rural location. The week was packed with learning opportunities. It will be difficult to capture everything in one blog entry, but I will try. Sorry if is this too long.

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