THE EMERGENCE OF PARALLEL MARKETS IN A TRANSITION ECONOMY - THE CASE OF MOZAMBIQUE

The food rationing scheme in Maputo, Mozambique was intended to ensure food security for the poor. An analysis of survey data reveals that e ven households that possess ration cards are mainly reliant on paralle l markets, instead of the ration system, for their purchases. The resu lts indicate that market liberalization, including eliminating rationi ng, will at worst be neutral for the poor, and more Likely be benefici al since the treasury will capture the rents associated with rationing that presently accrue to traders and parastatals.