Economic Motors for Poverty Reduction in Madagascar

Cornell Food and Nutrition Working Paper No. 144

53 Pages Posted: 10 Nov 2003

See all articles by Paul Dorosh

Paul Dorosh

International Food Policy Research Institute (IFPRI)

Steven Haggblade

International Food Policy Research Institute

Christen Lungren

International Food Policy Research Institute (IFPRI) - Development Strategies and Governance Division

Tiaray Razafimanentena

Institut National de la Statistique (INSTAT)

Zaza Burton Randriamiarana

Institut National de la Statistique (INSTAT)

Date Written: May 2003

Abstract

This study aims to evaluate the effect of four investments to achieve pro-poor economic growth: 1. Increase in agricultural productivity of rice and cassava; 2. Investments in roads that lead to a reduction of marketing costs; 3. Increase in private investments in the Free Trade Zone; 4. Increase of investments in tourism. Given that the evaluation of the impact of such investments is complex, the authors use a newly constructed computable general equilibrium model (CGE) of Madagascar that captures all the interactions within the Malagasy economic system. As expected, the four investments have markedly different poverty effects. Agricultural research (leading to increased agricultural productivity and increased food production) and road construction increase incomes of the rural poor, and benefit poor urban consumers through reductions in food prices. The other two investments - the Free Trade zone and tourism - are more beneficial for urban households, both poor and non-poor. Tourism also has non-negligible effects on the rural poor in some regions through increased employment and earnings opportunities. Hence, each investment has a different and important role to play for poverty alleviation in Madagascar.

Keywords: Poverty, Madagascar, Agriculture, Free Trade Zone, Tourism, Roads

JEL Classification: D5, I3

Suggested Citation

Dorosh, Paul and Haggblade, Steven and Lungren, Christen and Razafimanentena, Tiaray and Burton Randriamiarana, Zaza, Economic Motors for Poverty Reduction in Madagascar (May 2003). Cornell Food and Nutrition Working Paper No. 144, Available at SSRN: https://ssrn.com/abstract=453200 or http://dx.doi.org/10.2139/ssrn.453200

Paul Dorosh (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

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Washington, DC 20005
United States
+1 202-862-5600 (Phone)
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Steven Haggblade

International Food Policy Research Institute ( email )

1201 Eye St, NW,
Lusaka, 20005
Zambia

Christen Lungren

International Food Policy Research Institute (IFPRI) - Development Strategies and Governance Division ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Tiaray Razafimanentena

Institut National de la Statistique (INSTAT)

B.P. 485
Antananarivo 101
Madagascar

Zaza Burton Randriamiarana

Institut National de la Statistique (INSTAT) ( email )

B.P. 485
Antananarivo 101
Madagascar
0320245060 (Phone)

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