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Economy-wide gains from decentralized water allocation in a spatially heterogenous agricultural economy

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  • DIAO, XINSHEN
  • ROE, TERRY
  • DOUKKALI, RACHID

Abstract

This paper analyzes the economy-wide gains obtainable from the allocation of surface irrigation water to its most productive use, and evaluates a decentralized mechanism for achieving this result in a spatially heterogeneous environment. The focus country for the analysis is Morocco. The analysis is based on a general equilibrium model that, in addition to the rest of the economy, captures 82 agricultural production activities, 66 of which are in seven separately identified water districts that span the entire country. The results suggest that a decentralized water trading mechanism could increase agricultural output by 8.3 per cent, affect the rental rates of other agricultural inputs at the national level, including labour, and have economy-wide effects that entail a decline in the cost of living, an increase in aggregate consumption, and expansion of international trade.

Suggested Citation

  • Diao, Xinshen & Roe, Terry & Doukkali, Rachid, 2005. "Economy-wide gains from decentralized water allocation in a spatially heterogenous agricultural economy," Environment and Development Economics, Cambridge University Press, vol. 10(3), pages 249-269, June.
    • Handle: RePEc:cup:endeec:v:10:y:2005:i:03:p:249-269_00
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    Cited by:

    1. Roberto Ponce & Francesco Bosello & Carlo Giupponi, 2012. "Integrating Water Resources into Computable General Equilibrium Models - A Survey," Working Papers 2012.57, Fondazione Eni Enrico Mattei.
    2. Roe, Terry & Dinar, Ariel & Tsur, Yacov & Diao, Xinshen, 2005. "Feedback links between economy-wide and farm-level policies: With application to irrigation water management in Morocco," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 905-928, November.
    3. Na Li & Xiaojun Wang & Minjun Shi & Hong Yang, 2015. "Economic Impacts of Total Water Use Control in the Heihe River Basin in Northwestern China—An Integrated CGE-BEM Modeling Approach," Sustainability, MDPI, vol. 7(3), pages 1-19, March.
    4. Li, Xing & Zhang, Qian & Liu, Yu & Song, Jia & Wu, Feng, 2018. "Modeling social–economic water cycling and the water–land nexus: A framework and an application," Ecological Modelling, Elsevier, vol. 390(C), pages 40-50.
    5. Mohamed Chemingui, 2010. "Poverty Effects from Reforming the Common Agriculture Policy in A Spatially Heterogeneous Agricultural Economy," Working Papers 573, Economic Research Forum, revised 11 Jan 2010.
    6. Ismail Ouraich & Wallace E. Tyner, 2014. "Morocco's Unique Situation in the Climate Change Arena: An Analysis of Climate Forecasts and their Link to Agriculture," WIDER Working Paper Series wp-2014-088, World Institute for Development Economic Research (UNU-WIDER).
    7. Koopman, Jason & Kuik, Onno & Tol, Richard & Van Der Vat, Marnix & Hunink, Joachim & Brouwer, Roy, 2017. "The economic impact of irrigation water scarcity from climate change: A CGE analysis distinguishing between surface and ground water," Conference papers 332884, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Cakmak, Erol H. & Dudu, Hasan & Saracoglu, Sirin & Diao, Xinshen & Roe, Terry & Tsur, Yacov, 2008. "Macro-Micro Feedback Links Of Irrigation Water Management In Turkey," Policy Research Working Paper Series 4781, The World Bank.
    9. Nadege Desiree Yameogo & Tiguune Nabassaga & Abebe Shimeles & Mthuli Ncube, 2014. "Diversification and Sophistication as drivers of structural transformation for Africa: The Economic Complexity Index of African Countries," Journal of African Development, African Finance and Economic Association (AFEA), vol. 16(2), pages 1-31.
    10. Roe, Terry L. & Smith, Rodney B.W., 2015. "The Conjunctive Use of Irrigation Water Over Time in Morocco: Strengthening Ecosystems and Development Linkages," Miscellaneous Publications 232878, University of Minnesota, Department of Applied Economics.
    11. Rashid Hassan & James Thurlow, 2011. "Macro–micro feedback links of water management in South Africa: CGE analyses of selected policy regimes," Agricultural Economics, International Association of Agricultural Economists, vol. 42(2), pages 235-247, March.
    12. Tewodros Negash Kahsay & Onno Kuik & Roy Brouwer & Pieter Zaag, 2018. "The Transboundary Impacts of Trade Liberalization and Climate Change on the Nile Basin Economies and Water Resource Availability," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(3), pages 935-947, February.
    13. Ouraich, Ismail & Tyner, Wallace E., 2014. "Climate change impacts on Moroccan agriculture and the whole economy: An analysis of the impacts of the Plan Maroc Vert in Morocco," WIDER Working Paper Series 083, World Institute for Development Economic Research (UNU-WIDER).
    14. Jason F. L. Koopman & Onno Kuik & Richard S. J. Tol & Roy Brouwer, 2017. "The potential of water markets to allocate water between industry, agriculture, and public water utilities as an adaptation mechanism to climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 325-347, February.
    15. Ouraich, Ismail & Tyner, Wallace E., 2011. "A CGE Analysis of Economy-wide Impacts of Climate Change on Agriculture in Morocco," 2011 Conference: Impacts of Climate Change on Agriculture, December 6-7, 2011, Rabat, Morocco 188121, Moroccan Association of Agricultural Economics (AMAEco).
    16. Diao, Xinshen & Dinar, Ariel & Roe, Terry L. & Tsur, Yacov, 2007. "A General Equilibrium Analysis Of Conjunctive Ground And Surface Water Use With An Application To Morocco," Discussion Papers 7143, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    17. Ouraich, Ismail & Tyner, Wallace E., 2014. "Morocco's unique situation in the climate change arena: An analysis of climate forecasts and their link to agriculture," WIDER Working Paper Series 088, World Institute for Development Economic Research (UNU-WIDER).
    18. Zhang, Chunmei & Zhao, Yuanfeng & Xiu, Changbai, 2020. "Does Water Rights Trading Promote Economic Efficiency of Water Resource? : A global literature review," Conference papers 333128, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    19. Roe, Terry & Dinar, Ariel & Tsur, Yacov & Xinshen Diao, 2005. "Feedback links between economy-wide and farm-level policies : application to irrigation water management in Morocco," Policy Research Working Paper Series 3550, The World Bank.
    20. Wu, Feng & Zhan, Jinyan & Güneralp, İnci, 2015. "Present and future of urban water balance in the rapidly urbanizing Heihe River Basin, Northwest China," Ecological Modelling, Elsevier, vol. 318(C), pages 254-264.
    21. Mohamed A. Chemingui & Chokri Thabet, 2016. "Economy-Wide Analysis of Alternative Water Management Policies: A Comparative Analysis for Morocco and Tunisia," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(04), pages 1-27, December.
    22. Ismail Ouraich & Wallace E. Tyner, 2014. "Climate Change Impacts on Moroccan Agriculture and the Whole Economy: An Analysis of the Impacts of the Plan Maroc Vert in Morocco," WIDER Working Paper Series wp-2014-083, World Institute for Development Economic Research (UNU-WIDER).

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