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Distributional and Economy-Wide Effects of Post-Conflict Policy in Colombia

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  • Dora Elena Jiménez Giraldo Author-Name: Adrián Saldarriaga-Isaza Author-Name: Martín Cicowiez

Abstract

As part of the 2016 peace accord in Columbia, agricultural policies were proposed for rural regions most affected by an armed conflict that had gone on for decades. We evaluated the effects of these policies with particular attention to their economy-wide and distributional effects. We used a newly built 2014 social accounting matrix for Colombia to calibrate an extended version of the well-known PEP 1-1 Computable General Equilibrium model. The policies we considered were an increase in total factorial productivity because of infrastructure construction and greater technical assistance and employment subsidies intended to promote the substitution of illicit crops. We found that value added, demand for labor, and factor incomes increased in the areas most affected by the conflict while the opposite occurred in the other areas. Moreover, total rural income increased as long as the financing mechanism did not involve an increase in the taxation of rural incomes. In general, distributional effects were strongly conditional on the financing mechanism adopted by the government.

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  • Dora Elena Jiménez Giraldo Author-Name: Adrián Saldarriaga-Isaza Author-Name: Martín Cicowiez, 2020. "Distributional and Economy-Wide Effects of Post-Conflict Policy in Colombia," Working Papers MPIA 2020-12, PEP-MPIA.
  • Handle: RePEc:lvl:mpiacr:2020-12
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    More about this item

    Keywords

    post-conflict; agricultural policy; CGE modeling; distributional effects;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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