Dorothée Boccanfuso

A Macro–Micro Analysis of the Effects of Electricity Reform in Senegal on Poverty and Distribution

Abstract This paper uses a computable general equilibrium (CGE) macro–micro model to explore the distributional effects of price reform in the electricity sector of Senegal. In the first part of the paper we analyse the distribution of electricity in Senegal by income quintiles, between 1995 and 2001. The analysis demonstrates that poor and rural households are not the main beneficiaries of the expanded network. The results of the CGE model show that direct price effects are weaker than general equilibrium effects on poverty and inequality. Moreover, compensatory policies tested can help attenuate some adverse effects.

The Intra-country Distributional Impact of Policies to Fight Climate Change: A Survey

Abstract In this paper we present a survey of distributional impact analysis of environmental policies with emphasis on taxes envisaged or implemented to reduce greenhouse gas emissions (GHG). These policies usually aim at reducing GHG directly or indirectly. However, they can produce important changes in factor allocation, relative prices in specific countries as well as on world markets when adopted by a large number of countries. Changes in welfare can be important for vulnerable groups of population in developing countries. This survey reviews the evidence on the incidence of these policies. In the process, it shows that the computable general equilibrium (CGE) microsimulation approach has not been fully exploited in the context.

A comparative analysis of funding schemes for public infrastructure spending in Quebec

The economic literature has been investigating the positive relation between public infrastructure spending and the productivity of the private sector since Munnell (1992). We have introduced this relationship into a recursive dynamic computable general equilibrium model of the Quebec economy to investigate various funding schemes to scale up infrastructure spending in the province. We draw our assumptions from Estache et al. (2010) combined with sectoral elasticity parameters. We conduct a comparative analysis where the funding comes from debt alone, and debt with sales tax, income tax and business tax. Our main finding is that the income tax seems to produce the most positive effects and the businesses tax the most negative effects, though differences are small.

Groundnut Sector Liberalization in Senegal: A Multi-household CGE Analysis

In Senegal, the poverty reduction strategy is taking place in a context where international trade liberalization impacts the agricultural sector as a whole, and the groundnut sector in particular. Against this backdrop, we have developed a micro-simulated multiple-household computable general equilibrium model similar to the one proposed by Decaluwé et al. (1999b, How to Measure Poverty and Inequfality in General Equilibrium Framework, CREFA Working Paper No. 9920, Université Laval, Québec). Five simulations have been carried out in order to assess their impact on several levels—namely the macroeconomic, sector-based and household levels. The first two simulations concern tariff reforms, whereas the last three examine the external shocks resulting from a change in export prices on the world market (namely, for groundnuts and groundnut oil). The point of these simulations is to assess how the liberalization of the groundnut industry and the privatization of the Société Nationale de Commercialisation des Oléagineux du Sénégal—two major elements in the Framework Agreement—may impact households, and thus to see in what ways these economic reforms relate to poverty and income distribution. The results show that reducing the special tax on edible oils is positive in terms of poverty effects and the reduction of world prices of groundnut has relatively strong negative effects on poor households if farmers are not protected via a fixed price.

Human Capital and Growth: New Evidences from African Data

Economic theory has long acknowledged a positive relation between human capital and economic growth (Smith, 1776; Becker, 1964), which was nevertheless called into question in the late 1990s (Caselli et al., 1996; Pritchett, 2001). The two primary criticisms evoked were the failure to consider diminishing returns to education and qualitative aspects of the stock of human capital. This work aims to redress inadequacies in the literature related to the usual proxy of human capital by advancing a composite indicator of human capital (PCA). This indicator allows for an integration of the qualitative aspects in question and uses the indicator of the stock of human capital (Mincer, 1974) to take diminishing returns into consideration. Adopting the methodology developed by Islam (1995) allows for the impact of human capital to become positive once again in the process of economic growth. The data also reveal a conditional convergence process for the 22 African countries considered over the period 1970 to 2000.

Macroeconomic and distributional impacts of jatropha-based biodiesel in Mali

Mali, a landlocked West African nation at the southern edge of the Sahara Desert, has introduced a program to produce biodiesel using jatropha curcas, a non-edible shrub widely available throughout the country by farmers for generations as a living fence for their gardens. The aim of the program is to partially substitute diesel, which is entirely supplied through imports, with domestic biodiesel produced from a feedstock that does not have any commercial value otherwise and thus has zero opportunity cost. This paper uses a computable general equilibrium model to investigate economy-wide and distributional impacts of large-scale jatropha production on different types of lands, and conversion of jatropha oil to biodiesel for domestic consumption. It assesses impacts on agricultural and other commodity markets, resource and factor markets, and international trade. The results are fed into a detailed household survey-based micro-simulation model to assess impacts on poverty and income distribution. The study finds that the expansion of jatropha farming would be beneficial in terms of both macroeconomic and distributional impacts as long as idle lands, which have been neither used for agriculture nor protected as forests, are utilized. However, if jatropha plantation is carried out on existing agriculture lands, the economy-wide impacts would be negative although it would still help reduce rural poverty.

A Segmented Labour Supply Model Estimation for the Construction of a CGE Microsimulation Model: An Application to the Philippines

Labour market analysis is an important element to understand the inequality and poverty within a given population. The literature reveals that the informal sector is characterised by a great deal of flexibility and is exempt from formal market rigidities on the one hand, but on the other hand, this sector can constitute a trap from which it is difficult to exit for workers active in the sector with low wages. In this article, we aim to identify the main characteristics differentiating the labour supply of workers on the informal and formal market in the Philippines while estimating these two labour supplies, capturing discrete choice or changes in employment status. We use these estimates to construct a labour supply model that can serve as an input for a broader macro–microsimulation model applied to the Philippines. The results of the estimation provide relatively intuitive findings, highlighting some differences between the two markets. We also shed some light on this macro–microsimulation modelling framework that is generally opaque, in describing how to construct a microsimulation model with endogenous discrete choice model linked to a computable general equilibrium (CGE) model. JEL Classification: C35, O53, J24, C81, O17

A Model of Horizontal Inequality

The concept of horizontal inequality is generally used in economics to refer to the unequal treatment of equal individuals by the fiscal system. For example, an economic system can treat unequally two individuals who hold identical levels of production factors. The following note will present a method that allows us to identify the level of horizontal inequality of an economic system.

Réformes economiques et croissance pro-pauvre : une application macro-micro aux Philippines

Dans la perspective d’une reduction acceleree de la pauvrete et l’atteinte des objectifs du millenaire pour le developpement, une riche litterature sur la croissance pro-pauvre s’est developpee a partir du milieu des annees 90 et propose des reformes pour generer une croissance soutenue tout en ameliorant les revenus et les conditions de vie des pauvres. Mais les analyses pour l’impact pro-pauvre des reformes sont souvent developpees en equilibre partiel et abordent tres peu a la fois les questions d’efficacite et d’equite dans la lutte contre la pauvrete. Elles se ont tres peu interessees aux interactions entre les politiques envisagees. Nous abordons ces questions a travers un modele d’equilibre general calculable (MEGC) statique dans lequel nous generons la croissance par l’endogeneisation du travail (variation du chomage ou de l’emploi) et les depenses publiques (externalites), en plus des reallocations des dotations factorielles. Nous lui combinons un modele menage, suivant l’approche top-down/bottom up, pour prendre en compte les effets retroactifs des comportements des menages et leur heterogeneite. Sur la base de cet outil (applique aux Philippines) qui permet de prendre en compte les effets imbriques de reformes economiques, nous montrons que la piste de complementarite des politiques (au sens de Edgeworth) peut constituer une alternative interessante dans la perspective d’acceleration de la reduction de la pauvrete et d’atteinte des objectifs du millenaires, a travers une croissance soutenue et equitable. Les resultats mitiges (voire nefastes) obtenus de la simulation de reformes liberales (suppression des subventions agricoles dans les pays developpes, promotion des exportations agricoles, liberalisation agricole dans les pays du Sud) suggerent egalement une prise en compte des specificites et contexte particuliers de chaque pays dans la mise en œuvre des reformes.

Choc extérieur, productivité, pauvreté et redistribution de revenu au Sénégal: Une analyse comparative à partir d’un modèle multiménages integers

Résumé La nouvelle orientation de la politique économique au Sénégal vise à accroître les revenus des pauvres et à attaquer la pauvreté là où elle est principalement localisée. La stratégie de réduction de la pauvreté va être mise en oeuvre dans un contexte de libéralisation des échanges commerciaux internationaux notamment dans le secteur agricole. Dans ce contexte, nous avons développé un modèle d’équilibre général calculable micro-simulé multi-ménages permettant d’évaluer l’impact que pourront avoir ces politiques agricoles à l’échelle des ménages, et nous avons établi le lien entre ces réformes économiques, la pauvreté et la distribution de revenu. Ce modèle offre beaucoup de flexibilité en permettant notamment de modifier la distribution des groupes cibles qui ne méritent pas d’être retenus avant l’exercice de simulation afin d’effectuer l’analyse de pauvreté et d’inégalité ex post à l‘exercice de modélisation. Nous avons également comparé les effets, en terme d’analyse de pauvreté et d’inégalité, entre une distribution paramétrique et une distribution empirique, et montré que ce choix engendrait des différences significatives quant aux effets sur la pauvreté. Les impacts sur la pauvreté sont assez importants, ce qui montre que cette approche offre un outil riche permettant d’évaluer l’impact de politiques économiques ou chocs externes sur la pauvreté et la distribution de revenu. De plus, nos résultats d’analyse de pauvreté suite à une augmentation du prix des biens agricoles sont contraires à d’autres applications à différents pays sur le même thème.