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Poverty and Inequality Impact Analysis Regarding Cotton Subsidies: A Mali-based CGE Micro-accounting Approach

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  • Dorothée Boccanfuso
  • Luc Savard

Abstract

In this paper, we construct for Mali the first country-specific CGE model including a micro-simulation component so as to analyse how removing cotton subsidies in developed countries would impact poverty and inequality. To that effect, we have used the micro-accounting approach proposed by Chen and Ravallion. The issue has attracted significant attention, as it has played no small part in stalling the broader trade agenda. So far, research has been mainly carried out with a partial equilibrium analysis, whereas we use the first CGE micro-simulation model. A 17 sector CGE model comprising almost 5,000 households is used to demonstrate that removing cotton subsidies would contribute towards a significant decrease in poverty in Mali. Moreover, our results show that removing cotton subsidies while keeping other agricultural subsidies does not lessen the positive effects observed. It also appears that removing subsidies would marginally contribute towards easing inequality in Mali. Copyright 2007 The author 2007. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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  • Dorothée Boccanfuso & Luc Savard, 2007. "Poverty and Inequality Impact Analysis Regarding Cotton Subsidies: A Mali-based CGE Micro-accounting Approach," Journal of African Economies, Centre for the Study of African Economies, vol. 16(4), pages 629-659, August.
    • Handle: RePEc:oup:jafrec:v:16:y:2007:i:4:p:629-659
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    Cited by:

    1. Luc Savard & Dorothee Boccanfuso & Jonathan Goyette & Véronique Gosselin & Clovis Tanekou Mangoua, 2014. "An impact analysis of the impact of climate change and adaptation policies on the forestry sector in Quebec. A dyanamic macro-micro framework," EcoMod2014 6787, EcoMod.
    2. Hans Lofgren & Martin Cicowiez, 2017. "A Proximity-Based Approach to Labor Mobility in CGE Models with an Application to Sub-Saharan Africa," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 120-165, June.
    3. Bourguignon, François & Bussolo, Maurizio, 2013. "Income Distribution in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1383-1437, Elsevier.
    4. Essama-Nssah, B., 2008. "Assessing the redistributive effect of fiscal policy," Policy Research Working Paper Series 4592, The World Bank.
    5. Xinyao Wang & Dan Li & Yue Yu, 2022. "Current Situation and Optimization Countermeasures of Cotton Subsidy in China Based on WTO Rules," Agriculture, MDPI, vol. 12(8), pages 1-16, August.
    6. Cicowiez, Martin & Lofgren, Hans & Escobar, Pamela, 2017. "How Many Households Does a CGE Model Need and How Should They Be Disaggregated?," Conference papers 332827, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Bouët, Antoine & Estrades, Carmen & Laborde, David, 2012. "Cooperation vs. non cooperation in the multilateral trading system: the impact on poverty and inequality in developing countries," Conference papers 332287, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Dorothée Boccanfuso & Véronique Gosselin & Jonathan Goyette & Luc Savard & Clovis Tanekou Mangoua, 2014. "An impact analysis of climate change and adaptation policies on the forestry sector in Quebec. A dynamic macro-micro framework," Cahiers de recherche 14-04, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    9. Camara, Alhassane & Savard, Luc, 2023. "Impact of agricultural input subsidy policy on market participation and income distribution in Africa: A bottom-up/top-down approach," Economic Modelling, Elsevier, vol. 129(C).
    10. Fousseini Traoré, 2012. "Do global cotton subsidies affect the Malian economy? New evidence from a multimarket-general equilibrium model," Economics Bulletin, AccessEcon, vol. 32(2), pages 1640-1652.
    11. Umed Temursho & Matthias Weitzel & Toon Vandyck, 2020. "Distributional impacts of reaching ambitious near-term climate targets across households with heterogeneous consumption patterns: A quantitative macro-micro assessment for the 2030 Climate Target Plan," JRC Research Reports JRC121765, Joint Research Centre.
    12. García Merchán, Gabriela, 2023. "Agricultural Subsidies in the Economy of Ecuador – An Assessment of Impact Through CGE Modelling," Papers 1413, World Trade Institute.
    13. Dorothée Boccanfuso & G. Rodolphe A. Missinhoun & Luc Savard, 2010. "Réformes economiques et croissance pro-pauvre : une application macro-micro aux Philippines," Recherches économiques de Louvain, De Boeck Université, vol. 76(3), pages 257-288.
    14. Saeed Solaymani, 2016. "Impacts of energy subsidy reform on poverty and income inequality in Malaysia," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(6), pages 2707-2723, November.

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