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© 1995 Oxford University Press and the Foundation for the European Review of Agricultural Economics

research-article

Assessing the impact of agricultural technology improvements in developing countries in the presence of policy distortions*

GIOVANNI ANANIA and ALEX F. McCALLA

Giovanni Anania, Dipartimento di Economia Politica Universita della Calabria 1-87030, Arcavacata di Rende (CS) Italy
University of California, Davis and World Bank

Received April 1, 1994;

Summary

This paper focusses on how policies most commonly used by developing countries affect both the size and the distribution of the benefits from technical change. Three sets of policies are analysed: different export taxes whose level is endogeneously determined, interventions to expand domestic consumption (a consumer subsidy and a food aid programme are considered), and the existence of a constraint on the foreign exchange which can be used to finance food imports. In some cases the benefits from the new technology are enhanced by the policy distortion, in others they are reduced. Even when the benefits from the new technology with the policy distortion in place are the same as those that would occur in a distortion-free world market, their distribution is different

Keywords: technical change, policy intervention, international trade, agricultural markets


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