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Reverse Dutch Disease with Trade Costs: Prospects for Agriculture in Africa's Oil-Rich Economies

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  • Porteous, Obie

Abstract

Reduced oil revenues since 2014 are stimulating tradable sectors in oil-exporting countries. I use an open economy model with internal and external trade costs to investigate the prospects for reverse Dutch disease in African countries with a comparative advantage in agriculture. While falling resource revenues lead factors of production to shift into agriculture, remote farmers can lose when trade costs make agricultural goods behave like non-tradables. Household survey data from Nigeria show a significant agricultural supply response that is correlated with exposure to international markets. Lowering trade costs and boosting agricultural productivity can help offset the lost income from oil.
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  • Porteous, Obie, 2021. "Reverse Dutch Disease with Trade Costs: Prospects for Agriculture in Africa's Oil-Rich Economies," 2021 Conference, August 17-31, 2021, Virtual 315028, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae21:315028
    DOI: 10.22004/ag.econ.315028
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    Cited by:

    1. Jingyi Wang & Qingning Lin & Xuebiao Zhang, 2023. "How Does Digital Economy Promote Agricultural Development? Evidence from Sub-Saharan Africa," Agriculture, MDPI, vol. 14(1), pages 1-20, December.

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    More about this item

    Keywords

    International Relations/Trade; Agricultural and Food Policy;

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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