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System-wide Impacts of Agricultural Export Taxes: A Simulation Experiment with Ethiopian Data

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  • Gelan, Ayele

Abstract

This paper examines rural-urban spillover effects of agricultural price policy in a developing economy. It employs a computable general equilibrium methodology based on a bi-regional social accounting matrix for Ethiopia. The simulation experiment quantifies system-wide impacts of exports tax on agricultural products. Protecting consumers (particularly urban households), transferring income from producers to consumers, and shifting resources from the agriculture to industry are among the most important motivations cited in the literature for exports tax on agricultural products in developing economies. However, taking inter-regional spill-over effects into account, this study shows that the removal of agricultural export tax does actually improve household welfare both in the rural and urban regions. Also, the elimination of export tax enhances structural transformation of the economy.

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File URL: http://mpra.ub.uni-muenchen.de/1490/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1490.

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Date of creation: 2004
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Handle: RePEc:pra:mprapa:1490

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Keywords: : export tax; rural-urban migration; household welfare; Ethiopia;

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  1. Maurice Schiff & Alberto Valdes, 1994. "The Plundering of Agriculture in Developing Countries," Reports _013, World Bank Latin America and the Caribean Region Department.
  2. Gelan, Ayele, 2002. "Trade liberalisation and urban-rural linkages: a CGE analysis for Ethiopia," Journal of Policy Modeling, Elsevier, vol. 24(7-8), pages 707-738, November.
  3. Hoff, Karla, 1991. "Land Taxes, Output Taxes, and Sharecropping: Was Henry George Right?," World Bank Economic Review, World Bank Group, World Bank Group, vol. 5(1), pages 93-111, January.
  4. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  5. Skinner, Jonathan, 1991. "If Agricultural Land Taxation Is So Efficient, Why Is It So Rarely Used?," World Bank Economic Review, World Bank Group, World Bank Group, vol. 5(1), pages 113-33, January.
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