Open Economies: Structural Adjustment and Agriculture

341 Pages·1992·3.7 MB·English

by  Ian Goldin (editor)

Many of the structural adjustment programmes applied in developing
countries and more recently in Eastern Europe have targeted their
agricultural sectors, which account for major shares of economic activity
and income. Liberalising agricultural trade has major effects on income
distribution and hence potentially significant implications for the political
economy of reform. These fundamental effects on the organisation of
economic activity and the relative positions of different economic sectors
remain, however, a neglected issue of policy analysis.
In this volume, derived from a joint conference held by the Centre for
Economic Policy Research and the OECD Development Centre in Paris in
April 1991, leading international experts explicitly consider such open
economy dimensions to structural adjustment. They focus in particular on
the relation of domestic to international reforms; the sequencing of trade,
sectoral and other reforms; the impact of structural adjustment on
infrastructure and investment; the design of policy programmes to stabi-
lise income and agricultural prices in open economies; and the impli-
cations for public finance of agricultural reform. They also assess the
prospects for the success of trade reform in increasing agricultural
competitiveness in world markets, focusing in particular on the circum-
stances in which the 'small country assumption' is violated and the policy
implications of its violation.

Open economies: structural
adjustment and agriculture
OECD Development Centre
The OECD Development Centre was established in 1962. Its main
activities are research, external relations, in particular with research and
training institutes in the world, and the organisation of informal meetings
with high-level representatives of Member and non-member countries to
discuss economic issues of mutual concern.
In its research activities, the Development Centre seeks to identify issues
that will become the subject of growing concern in the near future, and
whose implications are of vital interest to both Member and non-member
countries. It also seeks to suggest policy directions for dealing with these
issues.
The Centre maintains numerous contacts in the field of development and
encourages the worldwide exchange of experience and knowledge. It
thereby contributes to the flow of information on development and to the
bridging of differences between OECD Member and non-member coun-
tries in the perception and analysis of problems and policies relating to
development and interdependence.
President Louis Emmerij
Director of Co-ordination Jean Bonvin
Research Colin Bradford
External Relations Giulio Fossi
Senior Research Staff Ian Goldin
Christian Morrisson
Charles Oman
Helmut Reisen
David Turnham
17 September 1991
Centre for Economic Policy Research
The Centre for Economic Policy Research is a network of more than 130
Research Fellows, based primarily in European universities. The Centre
coordinates its Fellows' research activities and communicates their results
to the public and private sectors. CEPR is an entrepreneur, developing
research initiatives with the producers, consumers and sponsors of
research. Established in 1983, CEPR is already a European economics
research organisation with uniquely wide-ranging scope and activities.
CEPR is a registered educational charity. Grants from the Leverhulme
Trust, the Esmee Fairbairn Charitable Trust, the Baring Foundation, the
Bank of England and Citibank provide institutional finance. The ESRC
supports the Centre's dissemination programme and, with the Nuffield
Foundation, its programme of research workshops. None of these organi-
sations gives prior review to the Centre's publications nor necessarily
endorses the views expressed therein.
The Centre is pluralist and non-partisan, bringing economic research to
bear on the analysis of medium- and long-run policy questions. CEPR
research may include views on policy, but the Executive Committee of the
Centre does not give prior review to its publications and the Centre takes
no institutional policy positions. The opinions expressed in this volume
are those of the authors and not those of the Centre for Economic Policy
Research.
Executive Committee
Chairman Vice-Chairmen
Anthony Loehnis Jeremy Hardie
Sir Adam Ridley
Professor Giorgio Basevi Sarah Hogg
Honor Chapman Kate Mortimer
Guillermo de la Dehesa Alasdair Smith
Professor Jacob A. Frenkel Sheila Drew Smith
Officers
Director Deputy Director
Professor Richard Portes Stephen Yeo
Director of Finance and Research Administration
Wendy Thompson
17 September 1991

Open economies: structural
adjustment and agriculture
Edited by
IANGOLDIN
and
L. ALAN WINTERS
The right of the
University of Cambridge
to print and sell
all manner of books
was granted by
Henry VUI in 1534.
The University has printed
and published continuously
since 1584.
CAMBRIDGE UNIVERSITY PRESS
Cambridge
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Published by the Press Syndicate of the University of Cambridge
The Pitt Building, Trumpington Street, Cambridge CB2 1RP
40 West 20th Street, New York, NY 10011—4211, USA
10 Stamford Road, Oakleigh, Victoria 3166, Australia
© Cambridge University Press 1992
First published 1992
Printed in Great Britain at the University Press, Cambridge
A catalogue record for this book is available from the British Library
Library of Congress cataloguing in publication data
Open economies: structural adjustment and agriculture/edited by
Ian Goldin and L. Alan Winters,
p. cm.
Papers from a joint conference held by the Centre for Economic Policy Research
and the OECD Development Centre in Paris in April 1991.
Includes bibliographical references and index.
ISBN 0-521-42056-3 (hardback)
1. Produce trade - Government policy - Congresses.
2. Agriculture and state - Congresses.
3. Commercial policy - Congresses.
4. International economic relations - Congresses.
I. Goldin, Ian, 1955-
II. Winters, L. Alan.
III. Centre for Economic Policy Research (Great Britain)
IV. Organisation for Economic Co-operation and Development. Development Centre.
HD9000.6.064 1991
338.1 '8 -dc20 91-44688 CIP
ISBN 0 521 42056 3 hardback
CE
Contents
List of figures page xiv
List of tables xv
Preface: Louis Emmerij and Richard Portes xvii
Acknowledgements xviii
List of conference participants xix
1 Introduction: from macro to maize 1
Ian Goldin and L. Alan Winters
1 Introduction 1
2 Open economy analysis 3
3 The small country assumption and trade reform 5
4 Risk and adjustment 8
5 Government's role 10
6 Conclusion 12
Part One: Open economy analysis 13
2 Sequencing and welfare: labour markets and agriculture 15
Sebastian Edwards
1 Introduction 15
2 The sequencing of structural reforms: a general welfare
approach 18
3 The sequencing of reform and the agricultural sector: basic
results 25
4 Extensions: intermediate inputs, investment, and alternative
indexation 33
5 Concluding remarks 35
Discussion
Helmut Reisen 39
ix