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Measuring Agricultural Policy Bias: General Equilibrium Analysis of Fifteen Developing Countries

Henning Jensen, Sherman Robinson () and Finn Tarp ()

American Journal of Agricultural Economics, 2010, vol. 92, issue 4, 1136-1148

Abstract: Measurement is a key issue in the literature on price incentive bias induced by trade policy. We introduce a general equilibrium measure of the relative effective rate of protection, which generalizes earlier protection measures. For our fifteen sample countries, results indicate that the agricultural price incentive bias generally perceived to exist during the 1980s was largely eliminated during the 1990s. Results also demonstrate that general equilibrium effects and country-specific characteristics are crucial for determining the sign and magnitude of agricultural bias. Our comprehensive protection measure is therefore uniquely suited to capture the full impact of trade policies on relative agricultural price incentives. Copyright 2010, Oxford University Press.

Date: 2010
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