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Optimal allocation of agriculture’s public budget can improve transformation and healthy diets access in Ethiopia

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  • Sánchez, Marco V.
  • Cicowiez, Martín

Abstract

Agriculture is under transformation in sub-Saharan Africa where millions still do not have access to a healthy diet. Policy makers in this region should find ways to accelerate agricultural transformation while increasing access to healthy diets. Optimizing agriculture’s public budget stands out as a handy option. By combining a dynamic computable general equilibrium model and a multi-criteria decision-making technique, and applying them in the context of Ethiopia, this paper points to an important trade-off that policy makers should keep in mind. An optimal allocation of agriculture’s public budget aimed at increasing agri-food output, creating off-farm jobs and reducing rural poverty, which are agricultural transformation objectives, will help to reduce the cost of a healthy diet, allowing around 2 million more Ethiopians to afford it. This number could even be higher should policy makers allocate the budget optimally aiming at only lowering the cost of a healthy diet, but at the cost of reducing household income and slowing down transformation.

Suggested Citation

  • Sánchez, Marco V. & Cicowiez, Martín, 2023. "Optimal allocation of agriculture’s public budget can improve transformation and healthy diets access in Ethiopia," Journal of Policy Modeling, Elsevier, vol. 45(6), pages 1262-1280.
    • Handle: RePEc:eee:jpolmo:v:45:y:2023:i:6:p:1262-1280
    DOI: 10.1016/j.jpolmod.2023.09.005
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    More about this item

    Keywords

    Computable general equilibrium; Optimal policy design; Economic development; Agricultural transformation; Nutrition;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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