Trade reform, infrastructure investment, and structural transformation in Africa: Evidence from Guinea-Bissau

Semertesides Bitica Fereira and Júlio Vicente Cateia

Emerging Markets Review, 2023, vol. 55, issue C

Abstract: This study examines the impacts of trade reform and infrastructure investment on structural transformation and poverty alleviation in Guinea-Bissau using a dynamic computable general equilibrium model. We found that partial or complete tariff rate cuts accompanied by a scaling-up infrastructure investment funded by debt only positively impact macro-and micro-outcomes but do not generate structural transformation. Conversely, trade reform and infrastructure investment funded by a mix of debt and tax rates on the firm's income generate structural transformation with labor reallocation from agriculture to non-agricultural sectors. This structural transformation pattern favors the poor and contributes to reducing income inequality over time.

Keywords: Trade reform; Structural change; Poverty alleviation; Economic development; African economies; CGE modeling (search for similar items in EconPapers)
JEL-codes: C68 F13 F14 F61 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:55:y:2023:i:c:s1566014123000328

DOI: 10.1016/j.ememar.2023.101027

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