The Private Sector and the Marginalized Poor

An Assessment of the Potential Role of Business in Reducing Poverty and Marginality in Rural Ethiopia

by Christine Husmann (Author)
©2016 Thesis 259 Pages


The book examines the role that the private sector can play in reducing poverty and marginality in Ethiopia by providing improved agricultural inputs to marginalized poor farmers. By creating a marginality map the author analyzes who and where the marginalized poor are. Data from a household survey about purchasing behavior, demand and needs indicates that this group can be a promising market segment for the private sector if adequate business models are applied. Yet, an analysis of the institutions governing agricultural input markets shows that investments by the private sector are discouraged by de facto monopolies of the government on crucial elements of the different supply chains, including seed breeding, fertilizer imports and finance.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the author(s)/editor(s)
  • About the book
  • This eBook can be cited
  • Content
  • Figures
  • Tables
  • Maps
  • Boxes
  • Examples
  • Abbreviations
  • Acknowledgements
  • Abstract
  • I. Introduction
  • I-1 Background and motivation for the study
  • I-2 Innovative approaches and new roles: business in alteration
  • I-3 Research question and hypothesis
  • I-4 Definitions and conceptual framework
  • I-5 Design of the study and data sources
  • I-6 Ethiopia as study country
  • I-7 Outline of the study
  • II. Identifying marginality hotspots in Ethiopia: locating future markets?
  • II-1 Marginality – a short introduction of the concept
  • II-2 Where are the marginalized poor in Ethiopia?
  • II-2.1 Marginality hotspot mapping – method and data
  • II-2.2 The dimensions of marginality and their proxies
  • II-2.3 Sensitivity analysis and validation of the marginality hotspot map
  • II-2.4 Limitations of the mapping approach and implications for further analyses
  • II-3 How many people are marginalized in Ethiopia?
  • II-4 Marginality hotspots and their concurrence with other socio-economic and agro-ecologic factors
  • II-4.1 Marginality hotspots and agro-ecological zones
  • II-4.2 Ethnic diversity, ethnic dominance and marginality
  • II-5 Can business reach out to marginalized people?
  • II-6 Conclusion
  • III. The demand side of BoP markets: the marginalized poor as consumers and producers
  • III-1 Introduction: the people at the bottom of the economic pyramid
  • III-1.1 Who is the BoP and why it is important to know it
  • III-1.2 Need, latent need and demand
  • III-2 Who are the BoP consumers and on what do they spend?
  • III-2.1 Definitions of BoP consumers
  • III-2.2 On what do BoP consumers spend?
  • III-2.3 Factors influencing the purchasing behavior of the BoP – what do we know?
  • III-2.4 Preliminary conclusion: what do we know about BoP consumers?
  • III-3 Who is the BoP in Ethiopia? Needs and demand of the marginalized poor
  • III-3.1 Introduction
  • III-3.2 Survey methodology
  • III-4 Empirical findings about the people at the bottom of the economic pyramid in Ethiopia
  • III-4.1 Community characteristics
  • III-4.2 Basic characteristics of the respondents
  • III-4.3 Expenditures and savings of the marginalized poor
  • III-4.4 Needs and demand of the marginalized poor
  • III-4.5 Do the marginalized poor have access to improved agricultural inputs?
  • III-4.6 Do the marginalized poor participate on the market as sellers?
  • III-5 Conclusion: lessons learnt about the needs of the marginalized poor and potential untapped markets
  • IV. The supply side of BoP markets and prospects for the private sector to reduce poverty in rural Ethiopia
  • IV-1 Institutions and transaction costs – defining the concepts
  • IV-2 Transaction costs in the agricultural sector of poor countries – what do we know so far?
  • IV-2.1 Agriculture and the private sector in Ethiopia: a short introduction of the historical and institutional background
  • IV-2.2 National policies and regulations governing agricultural input markets
  • IV-2.3 Implications for the private sector
  • IV-3 Are there firms targeting the poor? Agricultural input provision in Ethiopia
  • IV-3.1 Seeds of major crops
  • IV-3.2 Why is there not more investment in seed production?
  • IV-3.3 The direct seed marketing pilots
  • IV-3.4 Institutions preventing the private sector from increasing seed production and targeting the marginalized poor
  • IV-3.5 What is the nature of transaction costs arising in the Ethiopian seed system?
  • IV-3.6 The fertilizer system
  • IV-3.7 Problems in the fertilizer system
  • IV-3.8 The private sector and the fertilizer market
  • IV-3.9 Institutional analysis: transaction costs along the fertilizer value chain
  • IV-3.10 Provision of other seeds and agro-chemicals
  • IV-4 Conclusion: institutions and the private sector on agricultural input markets
  • V. Conclusion
  • VI. References
  • VII. Appendix

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ISBN (Hardcover)
Publication date
2016 (May)
Transaction costs Institutions Purchasing behaviour
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2016. 259 pp., 10 coloured fig., 9 b/w fig., 17 tables

Biographical notes

Christine Husmann (Author)

Christine Husmann studied geography, economics, sociology and business administration in Trier, Valencia and Tübingen and received her PhD from the Center for Development Research (ZEF) of the University of Bonn.


Title: The Private Sector and the Marginalized Poor
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262 pages