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GTAP Resource #3595

"Projecting agricultural distortions for a 2030 GTAP database"
by Nelgen, Signe and Kym Anderson

When sectoral and economy-wide modelers seek to analyse the effects of prospective economic changes over coming decades for a future year such as 2030, trade policy endogeniety typically is ignored and the default assumption about trade-related industrial and border policies is that they do not change over the projection period. Yet historical evidence suggests such policies change a great deal over a similar number of years, and in the case of farm policies in fairly predictable systematic ways (Anderson 2010). How different might such policy interventions be in two decades from those in 2004 (the base year of the latest GTAP protection database)? This paper addresses that question by drawing on the World Bank’s historical agricultural distortion estimates in Anderson and Valenzuela (2008), some simple political economy theory, and a series of national political econometric equations for the 12 most important agricultural crop and livestock products in a sample of up to 75 countries. With those equations and the USDA’s projections of such variables as GDP and population to 2030, estimates of national agricltural protection rates in 2030 are reported. They thereby provide an alternative counterfactual to the common ‘business-as-usual’ projections approach of assuming the status quo will prevail on the policy front. Even if this approach is not as good as fully endogenizing the political economy of protection policy in a model such as GTAP, it at least provides an opportunity for GTAPers to explore the extent to which results could differ when selecting a different counterfactual for scenarios such as fully liberalizing trade-related policies in 2030.

Resource Details (Export Citation) GTAP Keywords
Category: 2011 Conference Paper
Status: Published
By/In: Presented at the 14th Annual Conference on Global Economic Analysis, Venice, Italy
Date: 2011
Created: Nelgen, S. (4/15/2011)
Updated: Nelgen, S. (6/7/2011)
Visits: 1,881
No keywords have been specified.

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