Feedback Links between Economy-Wide and Farm-Level Policies: Application to Irrigation Water Management in Morocco

29 Pages Posted: 6 Apr 2005

See all articles by Terry L. Roe

Terry L. Roe

University of Minnesota - College of Agricultural, Food and Environmental Sciences - Department of Applied Economics

Ariel Dinar

World Bank - Agriculture and Rural Development Department

Xinshen Diao

International Food Policy Research Institute (IFPRI)

Yacov Tsur

Hebrew University of Jerusalem - Department of Agricultural Economics and Management

Date Written: March 2005

Abstract

This paper focuses on policy interventions for improving irrigation water allocation decisions by including both macro and micro considerations in a unified analytical CGE framework. The approach is demonstrated, using the case of Morocco, by analyzing selected policy top-down and bottom-up) interventions and external shocks that affect the water sector. Both direct and indirect effects of these interventions are identified. The top-down (macro-to-micro) links are of a trade reform type. The bottom-up (micro-to-macro) links pertain to changes in farm water assignments and the possibility of water trading. We find that water productivity is strongly influenced by these policies, with the general equilibrium (indirect) effects modifying and sometimes reversing the partial equilibrium (direct) effects. We also find that the impacts of the two reforms we assessed are different, with trade reform having an absolute impact of a higher magnitude than the water reform. Finally, we show that the sequence of introducing the policy reforms has different consequences.

Suggested Citation

Roe, Terry L. and Dinar, Ariel and Diao, Xinshen and Tsur, Yacov, Feedback Links between Economy-Wide and Farm-Level Policies: Application to Irrigation Water Management in Morocco (March 2005). World Bank Policy Research Working Paper No. 3550. Available at SSRN: https://ssrn.com/abstract=700102

Terry L. Roe (Contact Author)

University of Minnesota - College of Agricultural, Food and Environmental Sciences - Department of Applied Economics ( email )

1994 Buford Avenue
St. Paul, MN 55108
United States

Ariel Dinar

World Bank - Agriculture and Rural Development Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-0434 (Phone)

Xinshen Diao

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States
202-862-8113 (Phone)
202-467-4439 (Fax)

Yacov Tsur

Hebrew University of Jerusalem - Department of Agricultural Economics and Management ( email )

P.O. Box 12
Rehovot, 76100
Israel

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