Transition Problems in Policy Reform: Agricultural Trade Liberalization in India

13 Pages Posted: 13 Oct 2003

See all articles by Servaas Storm

Servaas Storm

Delft University of Technology - Department of Economics

Abstract

What will be the domestic growth and distributional effects of agricultural trade liberalization in India? How fast should Indian agriculture be liberalized and what policies should characterize the transition? This paper uses Indian agriculture to analyze medium-term transition problems that arise in many major economic reforms. Employing a dynamic applied general-equilibrium model, the paper focuses on the implications for policy design of the absence of efficient capital and labor markets and on the distributional consequences of economic reform in the presence of realistic limits on available intervention instruments. The key finding is that trade adjustment should be supplemented by policies that raise land productivity and, because this takes time, the adjustment should be gradual.

Suggested Citation

Storm, Servaas, Transition Problems in Policy Reform: Agricultural Trade Liberalization in India. Available at SSRN: https://ssrn.com/abstract=426158

Servaas Storm (Contact Author)

Delft University of Technology - Department of Economics ( email )

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