Analysis of selected agricultural parastatals in the Ivory Coast

After background sections on parastatal theory and on the government"s dominant role in the Ivory Coast"s agricultural development, the author presents case studies of the cotton, oil palm, coffee, and cocoa parastatals and suggests ways to improve their efficiency. The author studies both allocative efficiency which examines the price incentives affecting parastatals" use of inputs and choice of outputs and the impact of parastatal activity on national resource allocation; and operational or X-efficiency in the use of resources, the latter type of efficiency from an institutional viewpoint. Notable problems found using allocative efficiency were that parastatals face government-set artificial prices and exchange rates and distorted incentives which encourage investment in economically unfeasible, capital-intensive farming schemes. Despite these distortions, the author finds that parastatals have generally allocated their resources well and inefficiencies are tolerable. X-efficiency, however, was found to suffer due to conflicting social welfare and financial objectives; control by the government in terms of changing policies, unreliable funding, organizational restructuring, and interference in daily decisionmaking; and unreliability of the public sector for agricultural research and development and for international marketing. Recommendations are that parastatals produce high-stake crops (e.g., those subject to price fluctuation) only if production is low-risk and parastatals have control over inputs; and create either multiple administrative units or technical packages to cope with geographical, human, and administrative diversity or confine their activities to one subsector; and use incentives to enroll smallholders in agricultural programs. The author concludes that while parastatals remain a viable path to rural development, West African governments must design them to suit their tasks and recognize the key role played by the private sector in efficient parastatal operation. Appended are a 24-item annotated bibliography (1967-79) and a 180-item bibliography (1945-80).