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Journal of African Economies Advance Access originally published online on February 1, 2007
Journal of African Economies 2007 16(3):439-484; doi:10.1093/jae/ejl043
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Right arrow H54 - Infrastructures; Other Public Investment and Capital Stock
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Right arrow O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
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© The author 2007. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Public Investment to Reverse Dutch Disease: The Case of Chad

Stephanie Levya,1

a Overseas Development Institute, London

This paper studies the relevance of agricultural policies for avoiding Dutch disease, which affects many less developed countries experiencing a resource boom. Using a computable general equilibrium model calibrated for Chad, we study the impact of using this country's annual oil revenue for public investment, particularly in the development of road and irrigation infrastructure. Our model takes into account the integration of markets and migration processes. We find that improving water access would reduce Chad's dependence on food aid and entail a substantial improvement in rural household welfare.

JEL codes: O110, O130, Q18

1 This research has been done and this paper written while I was at ARQADE, University of Toulouse. I thank Jean Paul Azam and Martin Ravallion for suggestions and helpful discussions. I would also like to thank Rodrigo Cubero and one anonymous referee, whose recommendations greatly helped to improve this paper. Useful comments on the paper were received from Laurent Pipitone, Stéphane Calipel, Denis Gromb, Sherman Robinson, Hans Lofgren Marc Vielle and seminar participants at Toulouse University, the International Food Policy Research Institute (IFPRI) and the CSAE annual conference at Oxford University. I would like to thank Erwin De Wandel, Jean Boursicot and the members of the French Embassy in N'Djamena for their assistance with the practical and professional aspects of my work in Chad and for making my stay there a true pleasure. All errors are mine.


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