Global Trade Models and Economic Policy Analyses: Relevance, Risks and Repercussions for Africa
AbstractComputable general equilibrium (CGE) models are widely used for trade policy analyses and recommendations. Simulation results from these models have also been used as a basis for offering advice to African countries on what positions to take in multilateral trade negotiations. There is however increasing discomfort with the use of these models for policy recommendations, especially in Africa. In this paper we compare the results of several CGE studies that examined the impact of potential Doha Round reforms on Africa and demonstrate that the results differ drastically both in terms of magnitude and direction. Part of the discrepancies in results can be explained by differences in database, model structure, and choice of parameters. Others are, however, difficult to explain because several studies either do not report key assumptions made or do not provide a clear description of how their framework differs from those in the literature. We also show that the modelling approach and the database used in most CGE studies do not take account of key features of African economies that have serious implications for the impact of trade reforms on Africa. Finally, we outline potential consequences of the misuse of CGE models for policy evaluation and suggest pitfalls to avoid if CGE model results are to be taken seriously by policy makers in Africa.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1851.
Date of creation: Dec 2006
Date of revision:
Trade Reforms; CGE Models; Doha Round; Africa;
Other versions of this item:
- Hakim Ben Hammouda & Patrick N. Osakwe, 2008. "Global Trade Models and Economic Policy Analyses: Relevance, Risks and Repercussions for Africa," Development Policy Review, Overseas Development Institute, vol. 26(2), pages 151-170, 03.
- F15 - International Economics - - Trade - - - Economic Integration
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
This paper has been announced in the following NEP Reports:
- NEP-AFR-2007-02-24 (Africa)
- NEP-ALL-2007-02-24 (All new papers)
- NEP-CMP-2007-02-24 (Computational Economics)
- NEP-INT-2007-02-24 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antoine Bou�t & Jean-Christophe Bureau & Yvan Decreux & Sébastien Jean, 2005.
"Multilateral Agricultural Trade Liberalisation: The Contrasting Fortunes of Developing Countries in the Doha Round,"
The World Economy,
Wiley Blackwell, vol. 28(9), pages 1329-1354, 09.
- Antoine Bouët & Jean-Christophe Bureau & Yvan Decreux & Sébastien Jean, 2004. "Multilateral Agricultural Trade Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round," Working Papers 2004-18, CEPII research center.
- Jean-Christophe Bureau & Antoine Bouet, Yvan Decreux, Sébastien Jean, 2005. "Multilateral agricultural trade liberalization: The contrasting fortunes of developing countries in the Doha Round," The Institute for International Integration Studies Discussion Paper Series iiisdp060, IIIS.
- Mohamed Hedi Bchir & Yvan Decreux & Jean-Louis Guerin & Sebastien Jean, 2002. "MIRAGE, un modele d'equilibre general calculable pour l'evaluation des politiques commerciales," Economie Internationale, CEPII research center, issue 89-90, pages 109-153.
- Timothy J. Kehoe, 2003.
"An Evaluation of the Performance of Applied General Equilibrium Models of the Impact of NAFTA,"
Levine's Working Paper Archive
506439000000000525, David K. Levine.
- Timothy J. Kehoe, 2003. "An evaluation of the performance of applied general equilibrium models of the impact of NAFTA," Staff Report 320, Federal Reserve Bank of Minneapolis.
- Francois, Joseph, 1998. "Scale Economies and Imperfect Competition in the GTAP Model," GTAP Technical Papers 317, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Liu, Jing & Arndt, Channing, 2004.
"Parameter Estimation and Measures of Fit in A Global, General Equilibrium Model,"
Journal of Economic Integration,
Center for Economic Integration, Sejong University, vol. 19, pages 626-649.
- Liu, Jing & Channing Arndt & Thomas Hertel, 2003. "Parameter Estimation and Measures of Fit in A Global, General Equilibrium Model," GTAP Working Papers 1200, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Tom Achterbosch & Hakim Ben Hammouda & Patrick Osakwe & Frank van Tongeren, 2004.
"Trade liberalisation under the Doha Development Agenda Options and consequences for Africa,"
- Achterbosch, Thom J. & ben Hammouda, H. & Osakwe, Patrick N. & van Tongeren, Frank W., 2004. "Trade Liberalisation Under The Doha Development Agenda; Options And Consequences For Africa," Report Series 29104, Agricultural Economics Research Institute.
- Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005.
"Would multilateral trade reform benefit Sub-Saharan Africans?,"
Policy Research Working Paper Series
3616, The World Bank.
- Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(4), pages 626-670, December.
- Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2005. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," Centre for International Economic Studies Working Papers 2005-18, University of Adelaide, Centre for International Economic Studies.
- Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," CEPR Discussion Papers 5049, C.E.P.R. Discussion Papers.
- Emran, M. Shahe & Stiglitz, Joseph E., 2005.
"On selective indirect tax reform in developing countries,"
Journal of Public Economics,
Elsevier, vol. 89(4), pages 599-623, April.
- M. Shahe Emran & Joseph E. Stiglitz, 2002. "On Selective Indirect Tax Reform in Developing Countries," International Trade 0210003, EconWPA.
- Valenzuela, Ernesto & Hertel, Thomas & Keeney, Roman & Reimer, Jeff, 2005. "Assessing Global CGE Model Validity Using Agricultural Price Volatility," GTAP Working Papers 1875, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Baunsgaard, Thomas & Keen, Michael, 2010.
"Tax revenue and (or?) trade liberalization,"
Journal of Public Economics,
Elsevier, vol. 94(9-10), pages 563-577, October.
- Barbara J. Spencer & James A. Brander, 1982. "Tariff Protection and Imperfect Competition," Working Papers 517, Queen's University, Department of Economics.
- Diao, Xinshen & Diaz-Bonilla, Eugenio & Robinson, Sherman & Orden, David, 2005. "Tell me where it hurts, an' I'll tell you who to call," MTID discussion papers 84, International Food Policy Research Institute (IFPRI).
- Eswaran, Mukesh & Kotwal, Ashok, 1990. "Implications of Credit Constraints for Risk Behaviour in Less Developed Economies," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 473-82, April.
- Angus Deaton, 1999.
"Commodity Prices and Growth in Africa,"
Journal of Economic Perspectives,
American Economic Association, vol. 13(3), pages 23-40, Summer.
- Swamy, Anand V., 1997. "A simple test of the nutrition-based efficiency wage model," Journal of Development Economics, Elsevier, vol. 53(1), pages 85-98, June.
- McKitrick, Ross R., 1998. "The econometric critique of computable general equilibrium modeling: the role of functional forms," Economic Modelling, Elsevier, vol. 15(4), pages 543-573, October.
- Vaqar Ahmed & Cathal O'Donoghue, 2010.
"External Shocks in a Small Open Economy: A CGE - Microsimulation Analysis,"
Lahore Journal of Economics,
Department of Economics, The Lahore School of Economics, vol. 15(1), pages 45-90, Jan-Jun.
- Vaqar Ahmed & Cathal O'Donoghue, 2009. "External Shocks in a Small Open Economy: A CGE-Microsimulation Analysis," Working Papers 0142, National University of Ireland Galway, Department of Economics, revised 2009.
- Cernat, Lucian & Onguglo, Bonapas & Ito, Taisuke, 2007.
"RTAs and WTO compatibility: Catch me if you can? The case of EPA negotiations,"
3645, University Library of Munich, Germany.
- Cernat, Lucian & Onguglo, Bonapas, 2008. "RTAs and WTO Compatibility: Catch Me If You Can? The Case of EPA Negotiations," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 489-517.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.