Agricultural liberalization, welfare, revenue and nutrition in developing countries
Demonstrates the importance of three second best issues in analysis of agricultural liberalization by developing countries: import tariffs and quotas, rent seeking in the allocation of import licenses, and the cost of raising tax revenues. We use a highly aggregated, full-employment computable general equilibrium model to explore the impacts of changed agricultural policies in low income less developed countries on several aspects of their economic performance. We consider various interactions of rent seeking with import restrictions, and use a model for a representative developing country. The model demonstrates that agricultural liberalization will be most successful when import restrictions consist of tariffs and least successful when they consist of fixed import quotas with rent seeking prevalent. The paper also demonstrates the types of calculations that we believe to be useful for policy analysis. -from Authors
