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Impact analysis of cotton subsidies on poverty: A CGE macro-accounting approach applied to Mali

Author

Listed:
  • Dorothée Boccanfuso

    () (GREDI, Faculte d'administration, Université de Sherbrooke)

  • Luc Savard

    () (GREDI, Faculte d'administration, Université de Sherbrooke)

Abstract

In this paper, we construct the first country specific CGE model for Mali with a micro-simulation component to analyze the poverty and inequality changes of removing cotton subsidies in developed countries. We used the macro-accounting approach proposed by Chen and Ravallion (2004). This issue has attracted significant attention as is has contributed to stall the broader trade agenda. Research on the issue has been mainly done with partial equilibrium analysis with a few exceptions. We use the first CGE-micro-simulation model to investigate. A 17 sectors CGE model with almost 5000 households is used to demonstrate that removal of subsidies on cotton will contribute to significant decrease in poverty in Mali. Our results show that combining the cotton subsidies removal to other agricultural subsidies does not attenuate the positive effects observed. We also show that the subsidies removal would marginally contribute to decrease inequality in Mali.

Suggested Citation

  • Dorothée Boccanfuso & Luc Savard, 2006. "Impact analysis of cotton subsidies on poverty: A CGE macro-accounting approach applied to Mali," Cahiers de recherche 06-04, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
  • Handle: RePEc:shr:wpaper:06-04
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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0604.pdf
    File Function: First version, 2006
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    Cited by:

    1. Prospère Backiny-Yetna & Franck Adoho & Issa Bouaré & Virginie Briand & Kassim Dabitao & Assa Gakou & Estelle Sommeiller & Dramane Traoré & Clarence Tsimpo & Quentin Wodon, 2009. "Tendance, profil et déterminants de la pauvreté au Mali de 2001 à 2006," Perspective Afrique, Association Africaine pour les Sciences sociales, vol. 4(1-3), pages 1-24.

    More about this item

    Keywords

    computable general equilibrium model; micro-simulation; poverty analysis; income distribution; agricultural subsidies;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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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