This book is the first of two companion volumes by these authors on trade shocks in controlled economies. Both theoretically innovative and drawing on extensive applied work, it addresses a number of issues in the forefront of economics, principally the relationship between macro and micro economics, by analysing the impact of an external macro shock - the coffee price boom - on each of two developing countries which have much in common but whose governmental organizations and objectives differ sharply.The authors focus on three important ways in which governments affect peasants: setting crop prices; controlling access to consumer goods; and provision of public services. They address these three areas using microeconomic analysis and household survey data collected in Kenya and Tanzania. Much of the analysis is relevant for a wide class of developing countries.