Information, Efficiency, and Welfare in Agricultural Markets

What do (don’t) we know?

Aparajita GoyalEconomist, World BankJanuary 18, 2012

Two Dominant QuestionsGiven proliferation of ICT interventions in agriculture:

What is the impact of these services on people's lives? What are the enabling factors for scaling up?

Growing body of rigorous, quantitative, independent studies Jensen 2007, Goyal 2010, Fafchamps & Minten 2011, Mitra,

Mookherjee, Torero and Visaria 2011 Aker 2008, Muto & Yamano 2009, Svensson & Yanagizawa

2009, Camacho & Conover 2010, Beuermann 2010

Information important for efficient functioning of markets - Costly search lowers competition, creates inefficient allocation

Impact of Market Information Systems?

Source: Jensen 2007

Source: Goyal 2010

Scaling up?ICT innovations make markets work better (good for

development) But other constraints limit effect on welfare, gap in

input effects Bigger issue is why MIS not scaling up as expected?

Fragmentation of the Market Crop type, operating system, frequency of information Typical of less mature markets

Financially Sustainable Business Models Private sector profits Government partnerships

LessonsPositive impact of ICT MIS on efficiency and welfare in certain

contexts Continue to build evidence, develop evaluation systems What, Why, How?

Not a Panacea for Development Necessary but not sufficient condition Cannot ignore investments in roads, electricity, infrastructure

Sustainable and Scalable Business Models IT Policy and Regulation Role played by government, private sector, donors,

communities