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GTAP Resource #4774

"Analyzing country strategies for structural transformation: Method and application to Uganda, Morocco and Guatemala"
by Cicowiez, Martin and Hans Lofgren

Many developing countries are striving to identify export-driven strategies for structural transformation that bring about rapid growth, often with the aim of achieving middle-income status. This paper presents an improved version of an innovative framework for medium- and long-run country strategy analysis that integrates elements of product-space (PS) analysis with CGE modeling. The approach is applied to Uganda, Morocco, and Guatemala in an analysis of the impact of alternative policies (government investment and taxation/subsidies) with a direct impact on incentives for production and exports in different sectors, influencing the evolution of growth, poverty, and economic structure.
More specifically, in terms of method, the analysis is based on a recursive-dynamic CGE model known as MAMS (Maquette for MDG Simulations) that has been augmented to incorporate the following PS features: (a) proximity between sectors influences the extent to which labor can be reallocated without a loss in labor effectiveness; (b) proximity-weighted learning-by-doing, driven by accumulated production, influences activity TFP; and (c) penetration of export markets may lead to quality upgrading and higher export prices. Due to the addition of PS features, additional data is needed, most importantly (a) a matrix of global proximities between sectors defined in standard fashion for tradable goods sectors (covered by Comtrade; definition based on revealed comparative advantage in exports); for other sectors (e.g., construction, utilities and services), same except for that export data is replaced by value-added data extracted from the GTAP 2007 database; (b) unit export price data for the modeled countries by sector and distance from unit price frontier for top-quality exporters (90th percentile); and (c) econometric estimates of the determination of country-level deviations from average unit export prices.

For the purpose of the simulations, selected goods sectors are defined ...

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Cicowiez, M. (4/15/2015)
Updated: Cicowiez, M. (4/15/2015)
Visits: 2,147
- Dynamic modeling
- Labor market issues
- Technological change
- Domestic policy analysis

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