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Beyond Experiments in Development EconomicsLocal Economy-wide Impact Evaluation$
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J. Edward Taylor and Mateusz J. Filipski

Print publication date: 2014

Print ISBN-13: 9780198707875

Published to Oxford Scholarship Online: September 2014

DOI: 10.1093/acprof:oso/9780198707875.001.0001

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Did Malawi Prove the Experts Wrong?

Did Malawi Prove the Experts Wrong?

10 (p.203) Did Malawi Prove the Experts Wrong?
Beyond Experiments in Development Economics

J. Edward Taylor

Mateusz J. Filipski

Oxford University Press

Countries use a variety of different mechanisms to raise rural incomes. Malawi has a large-scale fertilizer subsidy program, is initiating a social cash transfer program, and historically paid farmers above-market prices for their maize—three different means to transfer income to rural households. This chapter shows how to use local economy-wide impact evaluation methods to compare the efficiency of different transfer programs at turning public expenditures into rural income gains. Without the benefit of a new rural household survey, existing survey data had to be used to construct this impact evaluation model. Findings reveal that no single transfer mechanism is optimal under all market situations. The optimal way to transfer income to rural households is different in poor than in rich countries and under different market situations, and it depends critically on which households are being supported by the policy.

Keywords:   fertilizer subsidy, Malawi, cash transfers, transfer efficiency, price support, rural welfare, economy-wide model, agricultural subsidy, impact evaluation

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