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Feedback links between economy-wide and farm-level policies : application to irrigation water management in Morocco

Author

Listed:
  • Roe, Terry
  • Dinar, Ariel
  • Tsur, Yacov
  • Xinshen Diao

Abstract

The authors focus on policy interventions for improving irrigation water allocation decisions by including both macro and micro considerations in a unified analytical computable general equilibrium (CGE) framework. The approach is demonstrated, using the case of Morocco, by analyzing selected policy (top-down and bottom-up) interventions and external shocks that affect the water sector. Both direct and indirect effects of these interventions are identified. The top-down (macro-to-micro) links are of a trade reform type. The bottom-up (micro-to-macro) links pertain to changes in farm water assignments and the possibility of water trading. The authors find that water productivity is strongly influenced by these policies, with the general equilibrium (indirect) effects modifying and sometimes reversing the partial equilibrium (direct) effects. They also find that the impacts of the two reforms assessed are different, with trade reform having an absolute impact of a higher magnitude than the water reform. Finally, the authors show that the sequence of introducing the policy reforms has different consequences.

Suggested Citation

  • 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.
    • Handle: RePEc:wbk:wbrwps:3550
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    References listed on IDEAS

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    1. Xinshen Diao & Terry Roe & Agapi Somwaru, 2002. "Developing Country Interests in Agricultural Reforms under the World Trade Organization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 782-790.
    2. Tsur, Yacov & Dinar, Ariel & Doukkali, Rachid M. & Roe, Terry, 2004. "Irrigation water pricing: policy implications based on international comparison," Environment and Development Economics, Cambridge University Press, vol. 9(6), pages 735-755, December.
    3. R. Maria Saleth & Ariel Dinar, 2004. "The Institutional Economics of Water," Books, Edward Elgar Publishing, number 3443.
    4. Goldin,Ian & Winters,L. Alan (ed.), 1995. "The Economics of Sustainable Development," Cambridge Books, Cambridge University Press, number 9780521469579, September.
    5. 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.
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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. Scheierling, Susanne M. & Treguer, David O. & Booker, James F., 2015. "Water Productivity in Agriculture: Looking for Water in the Agricultural Productivity and Efficiency Literature," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205677, Agricultural and Applied Economics Association.
    3. Dinar, Ariel, 2012. "Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs," Policy Research Working Paper Series 6068, The World Bank.
    4. Brunner, Norbert & Lele, Ashwini & Starkl, Markus & Grassini, Laura, 2010. "Water sector reform policy of India: Experiences from case studies in Maharashtra," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 544-561, July.
    5. Scheierling, Susanne M. & Treguer, David O. & Booker, James F. & Decker, Elisabeth, 2014. "How to assess agricultural water productivity ? looking for water in the agricultural productivity and efficiency literature," Policy Research Working Paper Series 6982, The World Bank.
    6. Rui Fragoso & Carlos Marques, 2013. "The Economic Impact of Alternative Water Pricing Policies in Alentejo Region," CEFAGE-UE Working Papers 2013_02, University of Evora, CEFAGE-UE (Portugal).
    7. World Bank, 2006. "Reengaging in Agricultural Water Management: Challenges and Options," World Bank Publications - Books, The World Bank Group, number 6957.
    8. Susanne Scheierling & David O. Treguer & James F. Booker, 2016. "Water Productivity in Agriculture: Looking for Water in the Agricultural Productivity and Efficiency Literature," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 1-33, September.
    9. Dinar, Ariel & Kemper, Karin & Blomquist, William & Kurukulasuriya, Pradeep, 2007. "Whitewater: Decentralization of river basin water resource management," Journal of Policy Modeling, Elsevier, vol. 29(6), pages 851-867.
    10. Gohar, Abdelaziz A. & Ward, Frank A., 2010. "Gains from expanded irrigation water trading in Egypt: An integrated basin approach," Ecological Economics, Elsevier, vol. 69(12), pages 2535-2548, October.
    11. Scheierling, Susanne M., 2011. "Assessing the direct economic effects of reallocating irrigation water to alternative uses : concepts and an application," Policy Research Working Paper Series 5797, The World Bank.
    12. 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.
    13. Faust, Anne-Kathrin & Gonseth, Camille & Vielle, Marc, 2012. "The economic impact of climate driven changes in water availability in Switzerland," Conference papers 332185, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. van Heerden, Jan H. & Blignaut, James & Horridge, Mark, 2008. "Integrated water and economic modelling of the impacts of water market instruments on the South African economy," Ecological Economics, Elsevier, vol. 66(1), pages 105-116, May.
    15. World Bank, 2007. "Making the Most of Scarcity : Accountability for Better Water Management Results in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 6845.
    16. 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.
    17. Akbar Karimi & Reza Ardakanian, 2010. "Development of a Dynamic Long-Term Water Allocation Model for Agriculture and Industry Water Demands," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(9), pages 1717-1746, July.
    18. Chokri Thabet, 2014. "Water Policy and Poverty Reduction in Rural Area: A Comparative Economy Wide Analysis for Morocco and Tunisia," Working Papers 860, Economic Research Forum, revised Nov 2014.
    19. Teotónio, Carla & Rodríguez, Miguel & Roebeling, Peter & Fortes, Patrícia, 2020. "Water competition through the ‘water-energy’ nexus: Assessing the economic impacts of climate change in a Mediterranean context," Energy Economics, Elsevier, vol. 85(C).
    20. Martin Henseler & Ruth Delzeit & Marcel Adenäuer & Sarah Baum & Peter Kreins, 2020. "Nitrogen Tax and Set-Aside as Greenhouse Gas Abatement Policies Under Global Change Scenarios: A Case Study for Germany," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 299-329, July.
    21. Scheierling, S. M., 2014. "How to assess agricultural water productivity?: looking for water in the agricultural productivity and efficiency literature," IWMI Working Papers H046876, International Water Management Institute.
    22. 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.
    23. Munir A. Hanjra & Francis Gichuki, 2008. "Investments in agricultural water management for poverty reduction in Africa: Case studies of Limpopo, Nile, and Volta river basins," Natural Resources Forum, Blackwell Publishing, vol. 32(3), pages 185-202, August.

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