JOURNALOF Development ECONOMICS Journal of Development Economics 44 (1994) 351-380 Stabilization and redistribution of coffee revenues: A political economy model of commodity marketing boards Mauricio GArdenas* Fedesarrollo, Apartado A&o 75074, Bogotd, Colomhia Received May 1992, final version received April 1993 Abstract Domestic prices of export crops are important macroeconomic variables in primary- exporting countries. Not only are they key determinants of the business cycle, but also play a pivotal role in the resolution of distributive conflicts. Using a model where producers ‘delegate’ pricing decisions in a fully optimizing environment, this paper explores the relationship between the redistribution and stabilization functions of marketing boards. The results of the model, as well as the empirical evidence, suggest that different institutional arrangements are helpful in explaining differences in macroeconomic performance across countries. The analysis is carried out for coffee in Colombia, Costa Rica, C6te d’Ivoire and Kenya. zyxwvutsrqponmlkjihgfedcbaZYXWVUT Key words: Marketing boards; Coffee; Stabilization; Redistribution JEL c/ass@~~iont 013; 017; H2 1. Introduction Marketing boards are commonplace institutions in developing countries. With few exceptions, primary-exporting countries have developed marketing and pricing systems for export crops that include a ‘Board’ (as in anglophone East and West Africa) or a ‘C&se (as in francophone West Africa) endowed with monopsony power in the purchase of the relevant product. *This paper is a revised version of chapter 3 of my dissertation (CBrdenas, 1991). I am grateful to Albert Fishlow and Torsten Persson for their very helpful advise. I would like to thank, without implicating, Pranab Bardhan, Jere R. Behrman, Jeffrey Frankel, Gary McMahon, Maurice Obstfeld. Jo&z Antonio Ocampo, Panos Varangis, Brian Wright, and two referees. The participants of several seminars at UC Berkeley, Fedesarrollo, Banco de la RepCblica and the annual meeting of the Cedes-Cieplan-Fedesarrollo-PUC network also made useful suggestions. 0304-3878/94/$07.00 Q 1994 Elsevier Science B.V. All rights reserved SSDI 0304-3878(94)00018-8