[PEN-L:29948] cashews again

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Patrick Bond discussed this earlier here.

       BY:  MARGARET S. MCMILLAN
               Tufts University
               Department of Economics
            DANI RODRIK
               Harvard University
               John F. Kennedy School of Government
               National Bureau of Economic Research (NBER)
               Centre for Economic Policy Research (CEPR)
            KAREN HORN WELCH
               Independent

Document:  Available from the SSRN Electronic Paper Collection:
            http://papers.ssrn.com/paper.taf?abstract_id=325943

Paper ID:  NBER Working Paper No. W9117
     Date:  August 2002

  Contact:  DANI RODRIK
    Email:  Mailto:dani_rodrik@xxxxxxxxxxx
   Postal:  Harvard University
            John F. Kennedy School of Government
            79 John F. Kennedy Street
            Cambridge, MA 02138  UNITED STATES
    Phone:  (617) 495-9454
      Fax:  (617) 496-5747
  Co-Auth:  MARGARET S. MCMILLAN
    Email:  Mailto:MMCMILLA@xxxxxxxxx
   Postal:  Tufts University
            Department of Economics
            Medford, MA 02155  UNITED STATES
  Co-Auth:  KAREN HORN WELCH
    Email:  Mailto:horn_karen@xxxxxxxxx
   Postal:  Independent
            87 Hulme Court, Apt. 5c
            Stanford, CA 94305  UNITED STATES

ABSTRACT:
  Mozambique liberalized its cashew sector in the early 1990s in
  response to pressure from the World Bank. Opponents of the
  reform have argued that the policy did little to benefit poor
  cashew farmers while bankrupting factories in urban areas.
Using
  a welfare-theoretic framework, we analyze the available
evidence
  and provide an accounting of the distributional and efficiency
  consequences of the reform. We estimate that the direct
benefits
  from reducing restrictions on raw cashew exports were of the
  order $6.6 million annually, or about 0.14% of Mozambique GDP.
  However, these benefits were largely offset by the costs of
  unemployment in the urban areas. The net gain to farmers was
  probably no greater than $5.3 million, or $5.30 per year for
the
  average cashew-growing household. Inadequate attention to
  economic structure and to political economy seems to account
for
  these disappointing outcomes.


JEL Classification: O10, O50, F10



--

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx