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Reverse Dutch Disease with Trade Costs: Prospects for Agriculture in Africa's Oil-Rich Economies

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  • Porteous, Obie C.

Abstract

Reduced oil revenues since 2014 are stimulating tradable sectors in oil-exporting countries. I use an open economy model with internal and external trade costs to investigate the prospects for reverse Dutch disease in African countries with a comparative advantage in agriculture. While falling resource revenues lead factors of production to shift into agriculture, remote farmers can lose when trade costs make agricultural goods behave like non-tradables. Household survey data from Nigeria show a significant agricultural supply response that is correlated with exposure to international markets. Lowering trade costs and boosting agricultural productivity can help offset the lost income from oil.
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Suggested Citation

  • Porteous, Obie C., 2021. "Reverse Dutch Disease with Trade Costs: Prospects for Agriculture in Africa's Oil-Rich Economies," 2021 Annual Meeting, August 1-3, Austin, Texas 312677, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea21:312677
    DOI: 10.22004/ag.econ.312677
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    Cited by:

    1. Krantz, Sebastian, 2025. "Optimal investments in Africa's road network," Kiel Working Papers 2272, Kiel Institute for the World Economy, revised 2025.
    2. Jingyi Wang & Qingning Lin & Xuebiao Zhang, 2023. "How Does Digital Economy Promote Agricultural Development? Evidence from Sub-Saharan Africa," Agriculture, MDPI, vol. 14(1), pages 1-19, December.
    3. Ding, Haoyuan & Tang, Junjie & Zhang, Mo, 2025. "The bad neighborhood effect: Supply chain disruptions arising from neighboring wars," China Economic Review, Elsevier, vol. 89(C).
    4. Krantz, Sebastian Martin, 2024. "Optimal Investments in Africa’s Road Network," Policy Research Working Paper Series 10893, The World Bank.
    5. Graff, Tilman, 2024. "Spatial inefficiencies in Africa’s trade network," Journal of Development Economics, Elsevier, vol. 171(C).
    6. Ifeanyi Joachim Oduaro & Happiness Emeribe & Callistus Ogu, 2025. "Powering Well-Being: Untangling the Nexus of Energy Poverty, Quality of Life and Sustainable Development in Owerri, Imo State Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(8), pages 6954-6965, August.

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    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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