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Natural Resource Management and Economywide Policies in Costa Rica: A Computable General Equilibrium (CGE) Modeling Approach

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  • Persson, Annika
  • Munasinghe, Mohan

Abstract

A computable general equilibrium (CGE) model is used to trace the effects of government policies on Costa Rican forests in the presence of incomplete markets. The results indicate that correcting the market failure would, as expected, reduce deforestation. More interestingly, in the presence of the market failure, lowering the tax on unskilled labor reduces deforestation because people gain employment in other parts of the economy. Taxation of other produced goods changes the incentives for deforestation. For example, a tax on agricultural products elevates the relative price of capital and shifts resources away from the capital-intensive industrial sector toward the agricultural and forest sectors; as a result, such a tax increases deforestation. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Persson, Annika & Munasinghe, Mohan, 1995. "Natural Resource Management and Economywide Policies in Costa Rica: A Computable General Equilibrium (CGE) Modeling Approach," The World Bank Economic Review, World Bank, vol. 9(2), pages 259-285, May.
    • Handle: RePEc:oup:wbecrv:v:9:y:1995:i:2:p:259-85
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    Cited by:

    1. Pandey, Kiran D. & Wheeler, David, 2001. "Structural adjustment and forest resources - the impact of World Bank operations," Policy Research Working Paper Series 2584, The World Bank.
    2. Pattanayak Subhrendu K. & Ross Martin T. & Depro Brooks M. & Bauch Simone C. & Timmins Christopher & Wendland Kelly J. & Alger Keith, 2009. "Climate Change and Conservation in Brazil: CGE Evaluation of Health and Wealth Impacts," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(2), pages 1-44, September.
    3. Kalkuhl, Matthias & Fernandez Milan, Blanca & Schwerhoff, Gregor & Jakob, Michael & Hahnen, Maren & Creutzig, Felix, 2017. "Fiscal Instruments for Sustainable Development: The Case of Land Taxes," MPRA Paper 78652, University Library of Munich, Germany.
    4. Abdelgalil, E. A. & Cohen, S. I., 2001. "Policy modelling of the trade-off between agricultural development and land degradation--the Sudan case," Journal of Policy Modeling, Elsevier, vol. 23(8), pages 847-874, November.
    5. O'Ryan, Raúl & de Miguel, Carlos J. & Miller, Sebastian & Munasinghe, Mohan, 2005. "Computable general equilibrium model analysis of economywide cross effects of social and environmental policies in Chile," Ecological Economics, Elsevier, vol. 54(4), pages 447-472, September.
    6. Basu, Amrita & Nayak, Narayan Chandra, 2011. "Underlying causes of forest cover change in Odisha, India," Forest Policy and Economics, Elsevier, vol. 13(7), pages 563-569, September.
    7. Coxhead, Ian, 2000. "Consequences of a Food Security Strategy for Economic Welfare, Income Distribution and Land Degradation: The Philippine Case," World Development, Elsevier, vol. 28(1), pages 111-128, January.
    8. Centeno, Maria Luz N., 2000. "Deforestation In The Philippines: A Cge Modelling Approach," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123619, Australian Agricultural and Resource Economics Society.
    9. Angelsen, Arild, 1999. "Agricultural expansion and deforestation: modelling the impact of population, market forces and property rights," Journal of Development Economics, Elsevier, vol. 58(1), pages 185-218, February.
    10. Ian A. Coxhead, 1995. "Economic Modeling of Land Degradation in Developing Countries," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 385, Wisconsin-Madison Agricultural and Applied Economics Department.
    11. Maria Llop, 2020. "A Second-Best Analysis of Alternative Instruments for the Preservation of Natural Resources," Sustainability, MDPI, vol. 12(4), pages 1-17, February.
    12. Brockmann, Stephanie & Finnoff, David C. & Mason, Doran M. & Rutherford, Edward S. & Zhang, Hongyan, 2024. "Consequences of ecological aggregation in general equilibrium analysis of perturbed ecosystems," Ecological Economics, Elsevier, vol. 218(C).
    13. Sverre Grepperud & Henrik Wiig & Finn Roar Aune, 1999. "Maize Trade Liberalization vs. Fertilizer Subsidies in Tanzania: A CGE Model Analysis with Endogenous Soil Fertility," Discussion Papers 249, Statistics Norway, Research Department.
    14. O’RYAN Raul & DE MIGUEL Carlos & MILLER Sebastián & MUNASINGHE Mohan, 2010. "General Equilibrium Analysis of Cross Effects in Social and Environmental Policies: Case Study of Chile," EcoMod2003 330700114, EcoMod.
    15. World Bank, 2005. "Development Policy Lending and Forest Outcomes : Influences, Interactions, and Due Diligence," World Bank Publications - Reports 8288, The World Bank Group.
    16. Banerjee, Onil & Alavalapati, Janaki, 2009. "A computable general equilibrium analysis of forest concessions in Brazil," Forest Policy and Economics, Elsevier, vol. 11(4), pages 244-252, July.
    17. Conrad, Klaus, 2001. "Computable General equilibrium Models in Environmental and Resource Economics," Discussion Papers 601, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    18. Andrea Cattaneo, 2001. "Deforestation in the Brazilian Amazon: Comparing the Impacts of Macroeconomic Shocks, Land Tenure, and Technological Change," Land Economics, University of Wisconsin Press, vol. 77(2), pages 219-240.
    19. Abler, David G. & Rodriguez, Adrian G. & Shortle, James S., 1998. "Labor force growth and the environment in Costa Rica," Economic Modelling, Elsevier, vol. 15(4), pages 477-499, October.
    20. Dessus, Sebastien & Bussolo, Maurizio, 1998. "Is There a Trade-off Between Trade Liberalization and Pollution Abatement?: A Computable General Equilibrium Assessment Applied to Costa Rica," Journal of Policy Modeling, Elsevier, vol. 20(1), pages 11-31, February.
    21. Wiig, Henrik & Aune, Jens B. & Glomsrod, Solveig & Iversen, Vegard, 2001. "Structural adjustment and soil degradation in Tanzania: A CGE model approach with endogenous soil productivity," Agricultural Economics, Blackwell, vol. 24(3), pages 263-287, March.

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