The survivor peasant and the extension of the theory of risk [Elektronische Ressource] / Flavio Pinto Siabato
271 Pages
English
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The survivor peasant and the extension of the theory of risk [Elektronische Ressource] / Flavio Pinto Siabato

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Downloading requires you to have access to the YouScribe library
Learn all about the services we offer
271 Pages
English

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The Survivor Peasant And the Extension of the Theory of Risk The Survivor Peasant And the Extension of the Theory of Risk FLAVIO PINTO SIABATO The University of Flensburg January, 2009 To the  The Survivor Peasant And The Extension of the Theory of Risk CONTENT PART 1: GENERAL INTRODUCTION 10 1 ECONOMIC MOTIVE AND ECONOMIC ANALYSIS 17 1.1 THE ROLE OF THE MOTIVE IN THE ECONOMIC ANALYSIS 17 1.2 DEVELOPMENT AS PEASANTS ’ MOTIVE 22 1.2.1 Peasants’ Development: Incontestable but Innocuous 23 1.2.2 Contributions of the Agenda of Development Economics at the Micro Level 26 1.2.3 The Stagnation of the Research Agenda of Development Economics 27 1.3 THE TRAP OF THE ECONOMIC ANALYSIS 30 1.4 ECONOMIC ANALYSIS ACCORDING TO DIFFERENT MOTIVES 34 1.5 CHAPTER ’S SUMMARY 36 THPART 2: THE PEASANT IN ECONOMICS OF THE 20 CENTURY 38 2 THE EMERGENCE OF THE DEVELOPMENTALIST PEASANT (1900 –1970) 40 TH2.1 LEGACY OF 19 CENTURY ECONOMICS 41 2.1.1 Positive and Normative Economics 41 2.1.2 Other Useful Concepts 42 2.1.3 The Universality of End of Economics 43 2.1.4 Western Merchants and Western Altruists 44 2.

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Published 01 January 2009
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The Survivor Peasant
And the Extension of the Theory of Risk



























The Survivor Peasant
And the Extension of the Theory of Risk







FLAVIO PINTO SIABATO











The University of Flensburg
January, 2009















To the 


















The Survivor Peasant
And The Extension of the Theory of Risk


CONTENT

PART 1: GENERAL INTRODUCTION 10
1 ECONOMIC MOTIVE AND ECONOMIC ANALYSIS 17
1.1 THE ROLE OF THE MOTIVE IN THE ECONOMIC ANALYSIS 17
1.2 DEVELOPMENT AS PEASANTS ’ MOTIVE 22
1.2.1 Peasants’ Development: Incontestable but Innocuous 23
1.2.2 Contributions of the Agenda of Development Economics at the Micro Level 26
1.2.3 The Stagnation of the Research Agenda of Development Economics 27
1.3 THE TRAP OF THE ECONOMIC ANALYSIS 30
1.4 ECONOMIC ANALYSIS ACCORDING TO DIFFERENT MOTIVES 34
1.5 CHAPTER ’S SUMMARY 36
THPART 2: THE PEASANT IN ECONOMICS OF THE 20 CENTURY 38
2 THE EMERGENCE OF THE DEVELOPMENTALIST PEASANT (1900 –1970) 40
TH2.1 LEGACY OF 19 CENTURY ECONOMICS 41
2.1.1 Positive and Normative Economics 41
2.1.2 Other Useful Concepts 42
2.1.3 The Universality of End of Economics 43
2.1.4 Western Merchants and Western Altruists 44
2.2 PEASANTS IN ECONOMICS BEFORE THE MARSHALL ’S PLAN 45
2.2.1 Alexander Chayanov and the Subsistent Peasant 45
2.2.2 The Peasants in Economic Anthropology 51
2.2.3 Peasants’ Rationality 59
2.3 DESCRIPTIVE THEORIES AND PEASANTS 60
2.3.1 The Work of Milton Friedman on Risk and Consumption 61
2.3.2 The Safety–First Rule of Roy 65
2.3.3 The Theory of Risk Aversion of Arrows and Pratt 69
2.4 PEASANTS AND DEVELOPMENT 72
2.4.1 The Claims of Georgescu Roegen 73
2.4.2 Theodore Schultz and the Optimizing Peasant 74
2.4.3 Peasants in Theories of Development 79
2.5 CHAPTER ’S SUMMARY 81
3 THE RISK –COPING PEASANT (1970 – ) 83
3.1 NEW COURSES AND INERTIAS 83
3.1.1 The Subjects of Study 86
3.2 RURAL CONTRACTS 88
3.3 UNCERTAINTY AND RISK IN PEASANT ECONOMICS 89
3.4 RISK: ATTITUDES AND BEHAVIOR 91
3.4.1 Characterizing Peasants’ Attitudes toward Risk 93
3.4.2 What Rules Peasants’ Risk Behavior 95
3.5 RISK AVERSION AND ECONOMIC PERFORMANCE 98
4 The Survivor Peasant
And The Extension of the Theory of Risk


3.6 RISK SHARING 100
3.7 THE RISK –COPING RATIONALE 101
3.8 RISK –COPING AND CONSUMPTION SMOOTHING 104
3.8.1 Consumption Smoothing as the Driver of Risk Behavior 110
3.9 CHAPTER ’S SUMMARY 112
SUMMARY OF PART 2 114
PART 3: ECONOMICS OF SURVIVOR PEASANTS 118
4 THE SURVIVOR PEASANT 120
4.1 DEFINITION AND JUSTIFICATION 120
4.2 THE SURVIVOR BEHAVIOR 124
4.2.1 The Misguide of Risk Aversion 127
4.2.2 Actual Risk Behavior 130
4.3 THE UTILITY MODEL AND SURVIVOR BEHAVIOR 133
4.3.1 Utility and Development: Technical Shortcomings 135
4.3.2 Income vs. Consumption 138
4.3.3 Consumption Smoothing and Risk Behavior 139
4.4 THE SURVIVOR PEASANT IN ECONOMICS 141
4.4.1 The Chayanovian Peasant 143
4.4.2 The Semi–Tribal Peasant of Polanyi 145
4.4.3 The Safety–First Peasant 146
4.4.4 Sandmo’s Contribution 147
4.4.5 Food Security and Livelihoods 147
4.5 SURVIVAL AND DEVELOPMENT 148
4.6 CHAPTER ’S SUMMARY 150
5 ATTITUDES TOWARD UNCERTAINTY AND RISK 153
5.1 INTRODUCTION 153
5.1.1 The Problem 153
5.2 THE CONTEXT 154
5.2.1 The Bottlenecks 156
5.2.2 Premises of the Modeling 159
5.2.3 Uncertainty vs. Risk 160
5.3 ATTITUDES TOWARD UNCERTAINTY 162
5.3.1 Uncertainty and Surplus 164
5.4 RISK AND SURVIVAL MOTIVES 168
5.5 CHAPTER ’S SUMMARY 172
6 THE WILLINGNESS TO RISK AND THE FUNCTION OF RELATIVE RISK BEHAVIOR 174
6.1 INTRODUCTION 174
6.1.1 Theories of Risk 174
6.1.2 Scope and Goal 179
6.2 THE FUNCTION OF INFLOWS 181
6.3 THE WILLINGNESS TO RISK 182
5 The Survivor Peasant
And The Extension of the Theory of Risk


6.4 THE FUNCTION OF RELATIVE RISK BEHAVIOR 185
6.5 EVIDENCE OF THE SURVIVOR PEASANT 188
6.5.1 Data 188
6.5.2 Empirical Evidence 189
6.6 SUMMARY OF THE CHAPTER 192
7 MODELING THE SURVIVOR PEASANT WITH UTILITY FUNCTIONS 195
7.1 INTRODUCTION 195
7.1.1 Characteristics of the Model 195
7.2 THE PROBLEM 197
7.3 NORMATIVE IMPLICATIONS 201
SUMMARY OF PART 3 203
PART 4: NORMATIVE ISSUES 205
8 NORMATIVE ANALYSIS FOR SURVIVOR ACTORS 207
8.1 INTRODUCTION 207
8.2 THE ACHILLES ’ HEEL OF DEVELOPMENT ECONOMICS 209
8.3 FOR A NORMATIVE ANALYSIS FOR SURVIVOR ACTORS 215
8.3.1 Motive, Behavior and Context 217
8.3.2 Shortcomings of What Should Be 218
8.4 THE NORMATIVE ANALYSIS OF “WHAT COULD BE ” 220
8.5 POLICIES BASED ON WHAT COULD BE 222
8.5.1 Objectives 224
8.5.2 Enhancing the Ability for Smoothing Consumption 225
8.5.3 Enhancing Inflows to Consumption 226
8.6 CHAPTER ’S SUMMARY 228
9 CONCLUSIONS 230
9.1 A PERSONAL DIGRESSION 230
9.2 CONTRIBUTIONS OF THIS WORK 231
9.2.1 Economic Analysis 231
9.2.2 The Economics of Peasants 231
9.2.3 The Economic Theory 232
9.2.4 The Normative Analysis 232
9.3 FINAL WORDS 233
APPENDIXES 234
1. PROCEDURE AND PROCESSING OF THE VSL DATA OF ICRISAT (CHAPTER 6) 234
9.3.1 Project Programming Fehler! Textmarke nicht definiert.
2. SOLUTION FOR THE MODELING OF THE SURVIVOR BEHAVIOR WITH UTILITY FUNCTIONS
(CHAPTER 7) FEHLER! TEXTMARKE NICHT DEFINIERT.
REFERENCES 236

6 The Survivor Peasant
And The Extension of the Theory of Risk


LIST OF FIGURES


Figure 1. Economic Analysis Ruled by Development 20
Figure 2. Economic Analysis and the Universality of Ends of Economics 35
Figure 3. Risk Aversion (Adapted from CEPA, 2007) 62
Figure 4. The Risk Coping Rationale 103
Figure 5. The Research on Risk and the Risk–Coping Peasant 113
Figure 6. The Progression of Views about Rural Development 117
Figure 7. The Function of Willingness to Risk 185
Figure 8. The Function of Relative Risk Behavior 187
Figure 9. Empirical Evidence of the RRB at the ICRISAT Villages 190
Figure 10. Level of ARA or Aversion to Uncertainty 192
Figure 11. Risk–Averse Peasant Forced to Gamble 197
Figure 12. The Survivor Problem 199
Figure 13. Evolution of the Economic Motive and Economic Analysis 208
Figure 14. Hierarchy of the Context, the Motive and the Behavior 218












7 The Survivor Peasant
And The Extension of the Theory of Risk


LIST OF TABLES


Table 1. Economic Analysis and Economic Motive 37
Table 2. Development of Economics, Normative Trends and the Description
of Peasants 82
Table 3. The Survivor Peasant 152
Table 4. Modeling Risk Behavior: the Problem and the Approach 173
Table 5. The Extension of the Theories of Risk 194
Table 6. The Survivor Peasant: Summary 204

















8


Acknowledgements

I am for life in deep and sincere gratitude with Professor Olav Hohmeyer
and with Professor Stephan Panther.

Professor Hohmeyer had the impeccable gesture of supporting my interest
in doing my studies. He showed a permanent interest in commenting and
discussing my research, even though the pathway of this investigation
gradually moved away from the original focus on peasants‟ development and
energy issues. Without his support, I couldn‟t fulfill this personal dream.
Thank you very much.

Professor Stephan Panther is one of the most important persons in my life.
He believed in my path, and firmly supported my study and my work. He
acted also as a disinterested and benevolent friend ready to attending my
questions and offering his intellectual support to my inquiries. His ideas in-
duced me the reflection on some issues that later gave form to my disserta-
tion. He probably does not know how far this work reflects his comments.
His attitudes supporting my intellectual freedom were crucial for the devel-
opment of an independent version of the economic subjects treated in this
work. He also supported my personal formation on economic issues.







PART 1
GENERAL INTRODUCTION
This work offers an interpretation of the economic behavior of the pea-
sants that differs from the version proposed by the doctrine of devel-
opment about their motive. This works essentially holds that survival
and not development is the economic motive of the peasants.

The survivor nature of the peasants is presented from several perspec-
tives: from the reading of the discussion about the peasantry during
ththe 20 century refined but not transformed by the rising up of the de-
scriptive theories, from the interpretation of the so–called stylized
facts characteristic of peasants‟ behavior, from the analysis of their ac-
tual risk behavior, and from the extension of the theory of risk, pro-
posed here for understanding the survivor behavior.

The main implication of the survivor peasant is a new normative
statement for rural development. The work sketches out the elements
of a new normative from the interpretation of the stylized facts and
strategies that characterize the behavior of the peasants. This section
introduces also a criticism to the normative statement of what should
be. This criticism is necessary, given the current prevalence of devel-
1opment as the paradigm for the improvement of rural areas .



1 Development, understood as a program for the perfection of markets, is the ulterior
goal of the usual normative of the economic analysis.