Economy-Wide Analysis of Alternative Water Management Policies: A Comparative Analysis for Morocco and Tunisia

Mohamed A. Chemingui and Chokri Thabet ()
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Mohamed A. Chemingui: Economic Development and Integration Division, UN-Economic and Social Commission for Western Asia, Riad El Solh Square, P. O. Box 118575, Beirut, Lebanon
Chokri Thabet: Département D’économie Et De Développement Rural, Institut Supérieur Agronomique de Chott Mériem, 4042 Chott Mériem, Sousse, Tunisia

Water Economics and Policy (WEP), 2016, vol. 02, issue 04, 1-27

Abstract: The main objective of this paper is to compare the impacts of alternative water policy management scenarios on the Tunisian and Moroccan economies. A dynamic computable general equilibrium model has been developed for each country and is used to explore the likely effects of alternative water policies on a variety of macroeconomic and sectoral variables. Results show that the low cost of water has encouraged farmers to adopt more water-intensive activities. Reducing public subsidies for water will directly affect farmers’ incomes which, under the current conditions, are expected to drop by about 1% by 2020 compared to the baseline scenario. However, the reduction of farmers’ incomes will be largely compensated for by the level of public savings from more efficient water resources management. Moreover, farmers will progressively increase their incomes as a result of introducing more appropriate activities with lower water demand. Finally, the ultimate economic outcomes of public management policies of water resources depend also on the type of fiscal policies to be followed in financing additional investments.

Keywords: Agriculture; water pricing; computable general equilibrium; Tunisia; Morocco (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1142/S2382624X16500302

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