incentives


Agricultural Instructors are a central component of the agricultural value chain. They are in charge of the agricultural advisory service and even help farmers to find markets and make cultivation decisions. There is, however, only a thin line between these extra activities they perform in addition to providing the advisory service. The central argument is that agriculture instructors often have enough incentive to effectively operate within the value chain. This means they may perform activities that are understood by some as implying a “conflict of interest”.
The paper was presented at the ITS India conference early this year. Somehow, we neglected to do a post about it. But, better late than never. Here it is. A subsequent revision of the ILDTS in late 2009 failed to address the concerns raised in this paper.
The government has not backed off on the discriminatory and anti-poor “market competition factor” that was subject to a detailed critique when announced. Per Mhz spectrum charge has been set on the basis of their market share or ‘market contribution factor’ (MCF) which was previously known as ‘utilisation factor’ in the draft licensing guideline of the BTRC. According to the policy of the MCF prescribed by the telecom ministry, if an operator has more than 20 percent market share, it will have to pay additionally, while an operator with less than 20 percent share will pay at a reduced rate. The MCF for Grameenphone now stands at 1.48, Banglalink 1.
Building on the previous blog post, I wrote up an op-ed on the latest developments of the Bangladesh license renewal drama that has been published in the Sunday Daily Star. What mistakes are made when incentives are not properly analyzed. More proof that the Bangladesh Ministry of Post and Telecom has a serious problem of capacity. The “market competition factor,” as presented, penalises operators with more customers. It creates a disincentive to add low-revenue customers and, indeed, an incentive to shed marginal customers.
The long dragged-out drama of license renewal in Bangladesh has taken one step toward closure, according to the Daily Star. The government yesterday finalised the process of how it will charge four mobile operators — Grameen-phone, Banglalink, Robi and Citycell — for renewing their licences for the next 15 years. A high-profile meeting presided over by Prime Minister Sheikh Hasina decided that the operators will pay at the rate of Tk 150 crore for per megahertz of airwave, which will be multiplied by the total allocated spectrum and a ‘market competition factor’. The meeting held at the Prime Minister’s Office also decided to give 3G (third generation) technology licences through auction. The per-MHz amount has been set arbitrarily.
The Sunday Leader (Sri Lanka) had the story excerpted below tucked away in the business pages. It contains several lessons for public policy that will be discussed below. They include the importance of interrogating data to make sure that your conclusions make sense and of course the ever present problem of incentives. Some 1.2 million cellular phones were imported illegally into the country last year, causing a loss in government revenue, the B.