This study presents the results of an empirical investigation into the effects of market reform programmes in Ethiopia and their impact on the volatility of coffee prices. The study covers the period from 1982 to the end of 2001, though its main focus is on the period after the commencement of the reforms in 1992. Using the Generalised Autoregressive Conditional Heteroskedasticity (GARCH) techniques, we argue that there is evidence that Ethiopia experienced a significant increase in coffee price volatility after the adoption of the market-oriented reform programmes. This is consistent with much of the literature. The econometric evidence presented in the paper, suggests that the market reform programmes were a significant cause of the increased volatility after 1992. The authors also suggest a number of possible policy responses to the price volatility, including strengthening the role of smallholder producer associations; and the possibility of adopting appropriate risk-management strategies. However, the institutional and structural characteristics of coffee production in Ethiopia within the global market for coffee may mitigate against the successful implementation of such policies. The fact that Ethiopia is a price-taker in this market and is therefore prone to external shocks in coffee prices over which it has little control or influence means that the country will continue to be highly vulnerable to the natural cycles that are endemic in the production of such primary commodities as coffee. Copyright © 2007 John Wiley & Sons, Ltd.

In seeking to extend rational choice theory from “market” to “political” behaviour, economists have encountered a paradox: namely, that the act of voting itself appears to be inconsistent with the assumption of rationality. This is true not only when self‐interest is assumed, but also when altruistic behaviour (at least in its non‐Kantian form) is allowed for. This article surveys the theoretical and empirical literature on the determinants of the decision to participate in voting, and concludes that this decision is responsive to changes in the expected benefits and costs of voting; even though the expected costs of voting must normally outweigh the expected benefits. Interpretations of this behaviour include the possibility that voters act rationally, but are misinformed about the likely effectiveness of their votes; alternatively, the electorate may include more Kantians than economists have generally been willing to admit.

The volatility of coffee prices exposes coffee producers to price risk. Price risk is one of many risks faced by commodity producers in developing countries. Coffee is widely traded in the international commodity derivative markets. This offers scope for coffee producers to manage their price risk by hedging on these markets. The hedging mechanism recommended is based on the use of coffee futures and options. The mechanism involves costs, so the benefits of hedging need to be evaluated in order to assess its usefulness for producers. It emerges that the main benefit lies in producers being able to allocate resources more efficiently in the production of coffee. An analysis of theoretical and field evidence shows that this benefit can potentially be quite high, especially for risk-averse producers. This underlines the need to provide producers with access to suitable price-risk hedging mechanisms.

The purpose of this paper is to develop a conceptual framework which combines the Strength of Weak Ties (SWT) concept with an innovative taxonomy for mitigating Principal-Agent conflicts. The taxonomy highlights the mechanisms through which African women can overcome the obstacles faced when setting up businesses. Design/Methodology/Approach: The paper discusses the role of 'weak ties' networks in entrepreneurial activities and integrates the concept with the key parameters of the Principal-Agent paradigm. The aim is to develop a taxonomy (or scorecard) for mitigating the challenges faced by women entrepreneurs in Africa from a Principal-Agent perspective. Six Principal-Agent parameters are analysed namely: attitudes towards risk; behaviour-based versus targets based contracts; asymmetric information; risk sharing; transaction costs; and verification and monitoring costs. Findings: With the aid of the taxonomy developed in the paper the authors analyse the channels through which 'strength of weak ties' networks may impact in mitigating the problems arising from the Principal-Agent paradigm. Some implications for women entrepreneurs in Africa are highlighted Research Implications: The current conceptual study suggests that the 'strength of weak ties' concept can be used by African women entrepreneurs to mitigate Principal-Agent problems. The authors argue that the original Principal-Agent taxonomy developed in the paper fills a conceptual research gap in the existing literature. Embedding the SWT concept within a Principal-Agent framework will facilitate further research not only to understand African women entrepreneurs' attitudes (and responses) towards risk and uncertainty. This will also facilitate greater understanding of the importance women attach to the role of incentives within their businesses. Practical Implications: The taxonomy presents new insights for understanding the most serious constraints that hinder women entrepreneurs in Africa. The taxonomy will be the basis for a follow-up empirical paper on selected African countries. Originality/Value: The originality of this study lies in the development of an innovative taxonomy which highlights the role of Strength of Weak Ties (SWT) social networks towards mitigating the Principal-Agent problem among African women entrepreneurs. The paper makes a significant contribution to the literature from a conceptual perspective.

This paper estimates the welfare effects for Ethiopian coffee producers from eliminating coffee price volatility. To estimate volatility the GARCH technique is applied to monthly coffee prices in Ethiopia for the period 1976-2012. To distinguish between the unpredictable and predictable components of volatility we obtain separate estimates of the conditional and unconditional variance of the residual. This is combined with estimates of the coefficient of relative risk aversion to measure the welfare effects from eliminating the unpredictable component of price volatility. A key finding is that the welfare gain from eliminating coffee price volatility is small; the gain per producer comes to a meagre US$ 0.76 in a year. This has important policy implications for the efficacy of price stabilisation mechanisms for coffee producers, i.e. any attempt to eliminate coffee price volatility at a cost may not be a preferred outcome for Ethiopian producers. The contribution of the paper lies in using the unconditional variance as it more truly reflects price risk faced by coffee producers without overestimating it