When Economic Reform Goes Wrong: Cashews in Mozambique
61 Pages Posted: 12 Feb 2003
There are 3 versions of this paper
When Economic Reform Goes Wrong: Cashews in Mozambique
When Economic Reform Goes Wrong: Cashews in Mozambique
When Economic Reform Goes Wrong: Cashews in Mozambique
Date Written: July 2002
Abstract
Mozambique liberalized its cashew sector in the early 1990s in response to pressure from the World Bank. Opponents of the reform have argued that the policy did little to benefit poor cashew farmers while bankrupting factories in urban areas. Using a welfare-theoretic framework, we analyze the available evidence and provide an accounting of the distributional and efficiency consequences of the reform. We estimate that the direct benefits from reducing restrictions on raw cashew exports were of the order $6.6 million annually, or about 0.14% of Mozambique GDP. However, these benefits were largely offset by the costs of unemployment in the urban areas. The net gain to farmers was probably no greater than $5.3 million, or $5.30 per year for the average cashew-growing household. Inadequate attention to economic structure and to political economy seems to account for these disappointing outcomes.
Keywords: International Development, International Trade and Finance
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Promises, Promises: Credible Policy Reform Via Signaling
By Dani Rodrik
-
When Economic Reform Goes Wrong: Cashews in Mozambique
By Margaret Mcmillan, Dani Rodrik, ...
-
When Economic Reform Goes Wrong: Cashews in Mozambique
By Margaret Mcmillan, Dani Rodrik, ...
-
Credibility, Real Interest Rates, and the Optimal Speed of Trade Liberalization
-
Agricultural Supply Response and Poverty in Mozambique
By Rasmus Heltberg and Finn Tarp
-
Globalization, Structural Change and Productivity Growth
By Margaret Mcmillan and Dani Rodrik
-
Middlemen, Non-Profits and Poverty
By Nancy H. Chau, Hideaki Goto, ...