Firms, farmers, and development actors view improved value chain governance as part of the solution for coordinating the actions of African farmers with the demands of emerging market segments. An important diversity of vertical coordination governance structures (such as contracting arrangements) and horizontal coordination governance structures (such as farmer organizations) are possible for linking farmers with such segments. The objective of this thesis is to better understand these governance structures and the conditions under which each is most cost-effective for achieving coordination. Building on the transaction cost economics literature, a framework that represents buyers’ and farmers’ governance structure choice is first developed. The framework is then empirically tested using a unique dataset from fifteen rice, maize, and millet/sorghum value chain case studies from Mali. Results show that marketing contracts and marketing cooperatives is the dominant governance structure pair used to coordinate farmers with higher-revenue segments in these cases. Transaction cost characteristics do influence buyers’ and farmers’ governance structure choice; additionally, time, social incentives, and the presence of other transaction cost-reducing governance structures may also be significant.
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