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

PEP Working Paper serie 2010-09

52 Pages Posted: 10 Oct 2010 Last revised: 12 Jul 2018

See all articles by Nadia Belhaj Hassine

Nadia Belhaj Hassine

affiliation not provided to SSRN

Veronique Robichaud

Université Laval

Bernard Decaluwe

Université Laval - Département d'Économique

Date Written: October 4, 2010

Abstract

Computable General Equilibrium (CGE) models have gained continuously in 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 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 effects induced from higher levels of trade are combined with a general equilibrium analysis of trade liberalization to evaluate the income and price changes. These effects are then used to infer the impact on poverty and inequality following the top-down approach. The model is applied to Tunisian data using the social accounting matrix of 2001 and the 2000 household expenditures surveys. Poverty is found to decline under agricultural and full trade liberalization and this decline is much more pronounced when the productivity effects are included.

Keywords: Openness, Agriculture, Productivity, Poverty, CGE modeling

JEL Classification: C24, C33, D24, F43, I32, Q17

Suggested Citation

Belhaj Hassine, Nadia and Robichaud, Veronique and Decaluwe, Bernard, Agricultural Trade Liberalization, Productivity Gain, and Poverty Alleviation: A General Equilibrium Analysis (October 4, 2010). PEP Working Paper serie 2010-09, Available at SSRN: https://ssrn.com/abstract=1687135 or http://dx.doi.org/10.2139/ssrn.1687135

Nadia Belhaj Hassine

affiliation not provided to SSRN ( email )

Veronique Robichaud

Université Laval ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Bernard Decaluwe (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-5561 (Phone)
418-656-7798 (Fax)

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