| Abstract: |
This paper presents the Development Policy Evaluation Model (DEVPEM), a new
simulation model which captures four critical aspects of rural economies in
developing countries: (1) the role of the household as both a producer and a
consumer of food crops; (2) high transaction costs of participating in
markets; (3) market linkages among heterogeneous rural producers and
consumers; (4) the imperfect convertibility of land from one use to another.
The results of simulations for six country models show that no untargeted
agricultural policy intervention is pro-poor within the rural economy. While
agricultural policy instruments are less efficient at raising rural incomes
than direct payments, the degree of inefficiency of some market interventions,
notably input subsidies, is not inevitably as high as observed in developed
OECD countries. |