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Agricultural Trade Liberalization, Productivity Gain and Poverty Alleviation: A General Equilibrium Analysis

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  • Nadia Belhaj Hassine

    () (Senior Economist, Economic Research Forum)

  • Veronique Robichaud
  • Bernard Decaluwé

Abstract

Computable General Equilibrium (CGE) models have gained popularity as an empirical tool for assessing the impact of trade liberalization on agricultural growth, poverty and income distribution. However, conventional models ignore the channels linking technical change in agriculture, trade openness and poverty. This study seeks to incorporate econometric evidence of these linkages into a CGE model to estimate the impact of alternative trade liberalization scenarios on welfare, poverty and equity. The analysis uses the Latent Class Stochastic Frontier Model (LCSFM) and the metafrontier function to investigate the influence of trade openness on agricultural technological change. The estimated productivity gains induced from higher levels of trade are combined with a general equilibrium analysis of trade liberalization to evaluate the direct welfare benefits of poor farmers and the indirect income and prices outcomes. These effects are then used to infer the impact on poverty using the traditional top-down approach. The model is applied to Tunisian data using the social accounting matrix of 2001 and the 2000 household expenditures surveys.

Suggested Citation

  • Nadia Belhaj Hassine & Veronique Robichaud & Bernard Decaluwé, 2010. "Agricultural Trade Liberalization, Productivity Gain and Poverty Alleviation: A General Equilibrium Analysis," Working Papers 519, Economic Research Forum, revised 05 Jan 2010.
  • Handle: RePEc:erg:wpaper:519
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    Cited by:

    1. De Silva, Nirodha & Malaga, Jaime E. & Johnson, Jeffrey W., 2013. "Trade Liberalization Effects On Agricultural Production Growth: The Case Of Sri Lanka," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143106, Southern Agricultural Economics Association.
    2. Llop Llop, Maria & Ponce Alifonso, Xavier,, 2012. "Agriculture, technological change and environmental sustainability: Looking for a win-win water policy strategy," Working Papers 2072/203158, Universitat Rovira i Virgili, Department of Economics.
    3. Manamba EPAPHRA, 2016. "Foreign Direct Investment and Sectoral Performance in Tanzania," Journal of Economics and Political Economy, KSP Journals, vol. 3(4), pages 670-719, December.
    4. Apata, Temidayo Gabriel & Folayan, A. & Apata, O.M. & Akinlua, J., 2011. "The Economic Role of Nigeria’s Subsistence Agriculture in the Transition Process: Implications for Rural Development," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108942, Agricultural Economics Society.
    5. Justice Gameli Djokoto, 2013. "Trade Openness and Technical Efficiency Change in Ghana’s Agriculture," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 1(1), pages 1-10.
    6. Nadia Belhaj Hassine & Veronique Robichaud & Bernard Decaluwé, 2010. "Does Agricultural Trade Liberalization Help The Poor in Tunisia? A Micro-Macro View in A Dynamic General Equilibrium Context," Working Papers 556, Economic Research Forum, revised 10 Jan 2010.

    More about this item

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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