In this paper, we construct the first country specific CGE model for Mali with a micro-simulation component to analyze the poverty and inequality changes of removing cotton subsidies in developed countries. We used the macro-accounting approach proposed by Chen and Ravallion (2004). This issue has attracted significant attention as is has contributed to stall the broader trade agenda. Research on the issue has been mainly done with partial equilibrium analysis with a few exceptions. We use the first CGE-micro-simulation model to investigate. A 17 sectors CGE model with almost 5000 households is used to demonstrate that removal of subsidies on cotton will contribute to significant decrease in poverty in Mali. Our results show that combining the cotton subsidies removal to other agricultural subsidies does not attenuate the positive effects observed. We also show that the subsidies removal would marginally contribute to decrease inequality in Mali.
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Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number
06-04.
Find related papers by JEL classification: D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
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