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Measuring Agricultural Policy Bias: General Equilibrium Analysis of Fifteen Developing Countries

  • Henning Tarp Jensen
  • Sherman Robinson
  • Finn Tarp

Measurement is a key issue in the literature on price incentive bias induced by trade policy. We introduce a general equilibrium measure of the relative effective rate of protection, which generalizes earlier protection measures. For our fifteen sample countries, results indicate that the agricultural price incentive bias generally perceived to exist during the 1980s was largely eliminated during the 1990s. Results also demonstrate that general equilibrium effects and country-specific characteristics are crucial for determining the sign and magnitude of agricultural bias. Our comprehensive protection measure is therefore uniquely suited to capture the full impact of trade policies on relative agricultural price incentives. Copyright 2010, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/ajae/aaq043
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Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 92 (2010)
Issue (Month): 4 ()
Pages: 1136-1148

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Handle: RePEc:oup:ajagec:v:92:y:2010:i:4:p:1136-1148
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  1. Henning Tarp Jensen & Finn Tarp, 2002. "CGE Modelling and Trade Policy: Reassessing The Agricultural Bias," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 383-405.
  2. C. Arndt & H. T. Jensen & S. Robinson & F. Tarp, 2000. "Marketing Margins and Agricultural Technology in Mozambique," Journal of Development Studies, Taylor & Francis Journals, vol. 37(1), pages 121-137.
  3. Krueger, Anne O, 1998. "Why Trade Liberalisation Is Good for Growth," Economic Journal, Royal Economic Society, vol. 108(450), pages 1513-22, September.
  4. Anderson, Kym, 2006. "Reducing distortions to agricultural incentives : progress, pitfalls, and prospects," Policy Research Working Paper Series 4092, The World Bank.
  5. Agenor, Pierre-Richard & Nabli, Mustapha K. & Yousef, Tarik & Jensen, Henning Tarp, 2007. "Labor market reforms, growth, and unemployment in labor-exporting countries in the Middle East and North Africa," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 277-309.
  6. Devarajan, Shantayanan & Sussangkarn, Chalongphob, 1992. "Effective Rates of Protection When Domestic and Foreign Goods Are Imperfect Substitutes: The Case of Thailand," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 701-11, November.
  7. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
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