Agriculture, Aid and Economic Growth in Africa
How can foreign aid to agriculture support economic growth in Africa? This paper constructs a geographically-indexed applied general equilibrium model that considers pathways through which aid might affect growth and structural transformation of la...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/224601526907459368/Agriculture-aid-and-economic-growth-in-Africa http://hdl.handle.net/10986/29857 |
| Summary: | How can foreign aid to agriculture
support economic growth in Africa? This paper constructs a
geographically-indexed applied general equilibrium model
that considers pathways through which aid might affect
growth and structural transformation of labor markets in the
context of soil nutrient variation, minimum subsistence
consumption requirements, domestic transport costs, labor
mobility and constraints to self-financing of agricultural
inputs. Using plausible parameters, the model is presented
for Uganda as an illustrative case. Three stylized scenarios
demonstrate the potential economy-wide impacts of both soil
nutrient loss and replenishment, and how foreign aid can be
targeted to support agricultural inputs that boost rural
productivity and shift labor to boost real wages. One
simulation shows how a temporary program of targeted
official development assistance (ODA) for agriculture could
generate, contrary to traditional Dutch disease concerns, an
expansion in the primary tradable sector and positive
permanent productivity and welfare effects, leading to a
steady decline in the need for complementary ODA for budget support. |
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