Stages in the Evolution of Thought on Rural Crime: A Vision from The Ohio State University

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Ohio State University. Department of Agricultural, Environmental, and Development Economics

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This paper was motivated by the problems of using financial markets to pursue nonfinancial objectives. It explores the roles of financial policies, technologies, and organizations in facilitating access to financial services for small rural producers, from the perspective of the Rural Finance Program at The Ohio State University. To place these views in historical context, the paper utilizes optimum intervention theory as a framework for interpretation of the evolution of thought on rural finance. It claims that an inadequate diagnosis of market imperfections and the failure to recognize an incomplete physical and institutional infrastructure as a key explanation of lack of access to credit led to the development of unsuccessful rural finance programs. The paper examines instances of policy failure and offers recommendations for the search of appropriate interventions. It identifies the costs of incorrect interventions in rural financial markets and it emphasizes the importance of institutional viability. The paper concludes that the provision of financial services is costly. The associated costs cannot be reduced by decree. This would require innovations in financial technologies and institutional organization.