Agricultural protection in industrialized countries and price distortions in developing countries are accused to hamper economic and agricultural development and are partly responsible for poverty and hunger in the Third World. A multi-commodity multi-country comparative static trade model is used to simulate the impact of different policy scenarios in this typical second best world for the case of South Africa. Special emphasis is given to the disincentive effect of production and to endogenous policy responses in South Africa. In conclusion South Africa could benefit a lot by liberalizing trade and agricultural policies world wide, although it is an importer for most of the considered commodities.


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