On the Choice of Appropriate Development Strategy: Insights Gained from CGEModelling of the Mozambican Economy

Henning Tarp and Finn Tarp

Journal of African Economies, 2004, vol. 13, issue 3, 446-478

Abstract: This paper uses a 1997 Computable General Equilibrium (CGE) model to analysethree strategies which Mozambique can pursue in furthering a sustainable developmentprocess. They include (i) agriculture-first, (ii)agricultural-development-led-industrialisation (ADLI) and (iii) a primary-sectorexport-oriented strategy. ADLI dominates the two other approaches and the distributionalimplications of ADLI are attractive. We also find that there are important synergyeffects to be reaped from balanced agricultural and agro-industrial development, and theprimarysector export-oriented strategy represents a potentially significant set ofcomplementary policies. Finally, the importance of taking structural differences amonghousehold groupings into account when formulating comprehensive pro-equity andanti-poverty development strategies is prominent.

Date: 2004
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