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Cash or Food Aid? A General Equilibrium Analysis for Ethiopia

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  • Ayele Gelan

Abstract

This article examines the relative effectiveness of cash and in-kind food aid, using an economy-wide modelling framework and a social accounting matrix constructed for Ethiopia. It argues that cash aid has larger positive effects on household welfare, with multiplier effects on households other than direct recipients, and that food aid provides a disincentive to local food production. However, where cash transfers cause food prices to rise, welfare losses may be suffered by those who are neither targeted nor beneficiaries. The highly aggregated nature of the model allows only a tentative policy recommendation in favour of cash transfers. Copyright 2006 Overseas Development Institute.

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Bibliographic Info

Article provided by Overseas Development Institute in its journal Development Policy Review.

Volume (Year): 24 (2006)
Issue (Month): 5 (09)
Pages: 601-624

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Handle: RePEc:bla:devpol:v:24:y:2006:i:5:p:601-624

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Cited by:
  1. Nguyen Viet, Cuong, 2010. "The Impact of Social Security on Household Welfare: Evidence from a Transition Country," MPRA Paper 40777, University Library of Munich, Germany.
  2. Wodon, Quentin & Zaman, Hassan, 2008. "Rising food prices in Sub-Saharan Africa : poverty impact and policy responses," Policy Research Working Paper Series 4738, The World Bank.
  3. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," IFPRI discussion papers 1106, International Food Policy Research Institute (IFPRI).
  4. Mariano, Marc Jim M. & Giesecke, James A., 2014. "The macroeconomic and food security implications of price interventions in the Philippine rice market," Economic Modelling, Elsevier, vol. 37(C), pages 350-361.
  5. Sabates-Wheeler, Rachel & Devereux, Stephen, 2010. "Cash transfers and high food prices: Explaining outcomes on Ethiopia's Productive Safety Net Programme," Food Policy, Elsevier, vol. 35(4), pages 274-285, August.

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