Welfare- and Trade-Based Indicators of National Distortions to Agricultural Incentives
Despite reforms over the past quarter-century, world agricultural markets remain highly distorted by government policies. Traditional indicators of those price distortions such as the nominal rate of assistance and consumer tax equivalent provide m...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/834231468331880018/Welfare-and-trade-based-indicators-of-national-distortions-to-agricultural-incentives http://hdl.handle.net/10986/28180 |
| Summary: | Despite reforms over the past
quarter-century, world agricultural markets remain highly
distorted by government policies. Traditional indicators of
those price distortions such as the nominal rate of
assistance and consumer tax equivalent provide measures of
the degree of intervention, but they can be misleading as
indicators of the true effects of those policies. By drawing
on recent theoretical literature that provides indicators of
the trade- and welfare-reducing effects of price and trade
policies, this paper develops more-satisfactory indexes for
capturing distortions to agricultural incentives. It then
exploits the agricultural distortion database recently
compiled by the World Bank to generate estimates of them for
both developing and high-income countries over the past half
century, based on a sample of 75 countries that together
account for all but one-tenth of the world's
population, gross domestic product (GDP) and agricultural
production. While they are still only partial equilibrium
measures, they provide a much better approximation of the
true trade and welfare effects of sectoral policies without
needing a formal model of global markets or even price
elasticity estimates. |
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