Food marketing liberalization and trader entry: Evidence from Madagascar

Food marketing liberalization was expected to induce massive trader entry and competitive markets in Africa. Despite evidence of trader entry, enterprise expansion remains difficult and many claim market power persists, though perhaps in different hands. This paper confronts this puzzle of substantial market entry that might not foster competition. Data from Madagascar reveal distinct groups within rural food marketing channels, separated by intraindustry mobility barriers that limit entry to a few niches. Moreover, individuals' place within the rural marketing network is defined largely by a priori social identity, so the experience of food marketing liberalization varies across socially distinct subpopulations. (C) 1997 Elsevier Science Ltd.