Optimal allocation of agriculture’s public budget can improve transformation and healthy diets access in Ethiopia

Marco Sánchez Cantillo and Martín Cicowiez

Journal of Policy Modeling, 2023, vol. 45, issue 6, 1262-1280

Abstract: Agriculture is under transformation in sub-Saharan Africa where millions still do not have access to a healthy diet. Policy makers in this region should find ways to accelerate agricultural transformation while increasing access to healthy diets. Optimizing agriculture’s public budget stands out as a handy option. By combining a dynamic computable general equilibrium model and a multi-criteria decision-making technique, and applying them in the context of Ethiopia, this paper points to an important trade-off that policy makers should keep in mind. An optimal allocation of agriculture’s public budget aimed at increasing agri-food output, creating off-farm jobs and reducing rural poverty, which are agricultural transformation objectives, will help to reduce the cost of a healthy diet, allowing around 2 million more Ethiopians to afford it. This number could even be higher should policy makers allocate the budget optimally aiming at only lowering the cost of a healthy diet, but at the cost of reducing household income and slowing down transformation.

Keywords: Computable general equilibrium; Optimal policy design; Economic development; Agricultural transformation; Nutrition (search for similar items in EconPapers)
JEL-codes: C61 C68 E61 O18 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:45:y:2023:i:6:p:1262-1280

DOI: 10.1016/j.jpolmod.2023.09.005

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