EconPapers    
Economics at your fingertips  
 

Distribution policy under trade liberalisation in Zimbabwe: a CGE analysis

M Chitiga
Authors registered in the RePEc Author Service: Margaret Mabugu

Journal of African Economies, 2000, vol. 9, issue 2, 101-131

Abstract: A computable general equilibrium model is used to simulate the economy-wide and income distribution effects of transfer policies to the poor. The model consists of seven income distribution groups - communal farmers, resettlement farmers, unskilled workers, agricultural wage workers, skilled workers, industrial capitalists and agricultural profit earners. The first four groups are treated as a low income group and the last three as a high income group. Experiments to increase each of the low income groups' incomes by 5% using different sources of finance are simulated using the model. These are: an increase in government expenditure without budget balancing measures; an increase in government transfers offset by a decrease in government spending elsewhere; and an increase in direct or indirect taxes. The results of such experiments indicate that a policy of increasing direct taxes and increasing the government deficit in order to support the transfers are favourable in terms of increased incomes in the short run. A policy of increasing indirect taxes and transferring the revenue raised to the poor ranks last in terms of reducing income inequalities. Finally, targeted transfers are generally better than universal transfers in terms of their benefits to low income groups and in reducing income inequalities between the low income and the high income groups.

Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/jae/9.2.101 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jafrec:v:9:y:2000:i:2:p:101-131.

Ordering information: This journal article can be ordered from
http://www.oup.co.uk/journals

Access Statistics for this article

Journal of African Economies is currently edited by Marcel Fafchamps

More articles in Journal of African Economies from Centre for the Study of African Economies (CSAE) Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ( this e-mail address is bad, please contact ) and Christopher F. Baum ().

 
Page updated 2021-03-28
Handle: RePEc:oup:jafrec:v:9:y:2000:i:2:p:101-131.