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On the Efficiency of Markets for Agricultural Products: Rice Prices and Capital Markets in Java, 1823–1853

Published online by Cambridge University Press:  31 January 2005

JAN LUITEN VAN ZANDEN
JAN LUITEN VAN ZANDEN
Affiliation:
Professor of economic history at the University of Utrecht and senior researcher at the International Institute of Social History in Amsterdam, Cruquiusweg 31, 1019 AT, Amsterdam, The Netherlands. E-mail: jvz@iisg.nl.
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Abstract

I use rice prices in three cities to analyze the efficiency of the marketing system and the institutional framework of Javanese agriculture, 1823–1853. I show that imperfections in rural capital markets caused the extreme fluctuations in rice prices and that the segmentation of the capital market modifies the McCloskey and Nash interpretation of the relationship between seasonal fluctuations of grain (or rice) prices and interest rates. I argue that these fluctuations proxy peasants' stress. Finally, I hypothesize that institutional and market failures explain the “noneconomic” behavior of Javanese peasants in Boeke's theory of dualistic economic development.

Type
ARTICLES
Information
The Journal of Economic History , Volume 64 , Issue 4 , December 2004 , pp. 1028 - 1055
Copyright
© 2004 The Economic History Association

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