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Public Investment to Reverse Dutch Disease: The Case of Chad


  • Stephanie Levy


This paper studies the relevance of agricultural policies for avoiding Dutch disease, which affects many less developed countries experiencing a resource boom. Using a computable general equilibrium model calibrated for Chad, we study the impact of using this country's annual oil revenue for public investment, particularly in the development of road and irrigation infrastructure. Our model takes into account the integration of markets and migration processes. We find that improving water access would reduce Chad's dependence on food aid and entail a substantial improvement in rural household welfare. Copyright 2007 The author 2007. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email:, Oxford University Press.

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  • Stephanie Levy, 2007. "Public Investment to Reverse Dutch Disease: The Case of Chad," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(3), pages 439-484, June.
  • Handle: RePEc:oup:jafrec:v:16:y:2007:i:3:p:439-484

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    References listed on IDEAS

    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993. "How infrastructure and financial institutions affect agricultural output and investment in India," Journal of Development Economics, Elsevier, vol. 41(2), pages 337-366, August.
    3. Auty, Richard M., 1994. "Industrial policy reform in six large newly industrializing countries: The resource curse thesis," World Development, Elsevier, vol. 22(1), pages 11-26, January.
    4. Pinto, Brian, 1987. "Nigeria during and after the Oil Boom: A Policy Comparison with Indonesia," World Bank Economic Review, World Bank Group, vol. 1(3), pages 419-445, May.
    5. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    6. Azam, Jean-Paul, 1999. "Dollars for Sale: Exchange Rate Policy and Inflation in Africa," World Development, Elsevier, vol. 27(10), pages 1843-1859, October.
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    Cited by:

    1. World Bank, 2009. "Economy-Wide Impact of Oil Discovery in Ghana," World Bank Other Operational Studies 18903, The World Bank.
    2. Johnson, Michael E. & Takeshima, Hiroyuki & Gyimah-Brempong, Kwabena, 2013. "Assessing the potential and policy alternatives for achieving rice competitiveness and growth in Nigeria:," IFPRI discussion papers 1301, International Food Policy Research Institute (IFPRI).
    3. repec:ipg:wpaper:2014-492 is not listed on IDEAS
    4. Dorothée Boccanfuso & Marcelin Joanis & Patrick Richard & Luc Savard, 2014. "A comparative analysis of funding schemes for public infrastructure spending in Quebec," Applied Economics, Taylor & Francis Journals, vol. 46(22), pages 2653-2664, August.
    5. Harald SCHMIDBAUER & Ece DEMIREL, "undated". "Monetary Authorities and Exchange Rate Volatility: Turkey and other Cases," EcoMod2010 259600150, EcoMod.
    6. Hannah Schürenberg-Frosch, 2014. "Improving Africa's Roads: Modelling Infrastructure Investment and Its Effect on Sectoral Production Behaviour," Development Policy Review, Overseas Development Institute, vol. 32(3), pages 327-353, May.
    7. Dorothée Boccanfuso & Marcelin Joanis & Mathieu Paquet & Luc Savard, 2015. "Impact de productivité des infrastructures: Une application au Québec," Cahiers de recherche 15-06, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    8. Sandrine Kablan & Josef Loening & Yasuhiro Tanaka, 2014. "Is Chad Affected by Dutch or Nigerian Disease?," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(5), pages 278-295.
    9. Viccaro, Mauro & Rocchi, Benedetto & Cozzi, Mario & Severino, Marino, 2015. "The socioeconomic impact derived from the oil royalty allocation on regional development," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207861, Italian Association of Agricultural and Applied Economics (AIEAA).
    10. Loening, Josef L., 2010. "Chad: rural policy note," MPRA Paper 28951, University Library of Munich, Germany.
    11. Issoufou SOUMAILA, 2015. "Escaping the Dutch Disease: The Role of Public Investment in Niger," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(2), pages 333-339, February.
    12. Sandrine A. Kablan & Josef L. Loening, 2012. "An empirical assessment of the Dutch disease channel of the resource curse: the case of Chad," Economics Bulletin, AccessEcon, vol. 32(3), pages 2007-2014.
    13. Robinson, Sherman & Levy, Stephanie, 2014. "Can cash transfers promote the local economy? A case study for Cambodia:," IFPRI discussion papers 1334, International Food Policy Research Institute (IFPRI).
    14. Hamzeh Arabzadeh, 2016. "Foreign Aid, Public Investment and Capital Market Liberalization," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2016018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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