Assessing the Impact of Agricultural Technology Improvements in Developing Countries in the Presence of Policy Distortions.

This paper focusses on how policies most commonly used by developing countries affect both the size and the distribution of the benefits from technical change. Three sets of policies are analysed: different export taxes whose level is endogenously determined, interventions to expand domestic consumption (a consumer subsidy and a food aid programme are considered), and the existence of a constraint on the foreign exchange which can be used to finance food imports. In some cases the benefits from the new technology are enhanced by the policy distortion, in others they are reduced. Even when the benefits from the new technology with the policy distortion in place are the same as those that would occur in a distortion-free world market, their distribution is different. Copyright 1995 by Oxford University Press.