Breaking down the Poverty and Growth effects of economic policy package: A Double-Calibration Analysis for Cameroun using Microsimulation CGE Model

This paper aims at explaining the significant poverty alleviation observed in Cameroon between 1993 and 2001. We decompose the poverty and macroeconomic impacts of the major economic policies led in Cameroon during this period (investment in infrastructures, devaluation, and enforcement of Value-Added Tax), in order to assess the intrinsic contribution of those policies taken individually. In this regard, we use the so-called Double-Calibration technique, within a Microsimulation CGE framework. As a result, the technological changes arisen between 1993 and 2001 explain alone: up to 31 percent the nationwide poverty alleviation (FGT 0), 45 percent of the GDP growth, and 4 percent of the rise in consumer price index. The contribution of considered policies: the devaluation of the CFA franc, the rehabilitation of infrastructures, and the customs and tax reform, are respectively two percent, 9 percent and 4 percent in poverty alleviation (FGT 0 index); one percent, 11 percent, and three percent in explaining GDP growth; and 65 percent, zero percent and 11 percent in explaining the rise in consumer price index.