Estimating the Effectiveness of Public Versus Private Distribution Systems: Insights from a Fertilizer Policy Reform in Malawi

Throughout much of the world, critical goods and services are provided by parallel public and private distribution systems. However, it is often difficult to causally differentiate the performance of these two channels. In this article, we utilize a policy change in Malawi to estimate the relative efficiency of public and private channels in distributing inputs to smallholder farmers. In the 2015/16 agricultural season, the government allowed a group of private-sector fertilizer dealers to distribute subsidized fertilizer in nine of the country’s 28 districts. We use a panel dataset and a difference-in-differences (DID) strategy to estimate the impact of the pilot reform on a set of variables encompassing the entire process of subsidized fertilizer acquisition and appropriate utilization. We find that households in districts where the private sector distributed subsidized fertilizer were 11 percentage points more likely to acquire it earlier in the planting season (p