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Diao et al. (2001) also run a dynamic version of their model. They incorporate the effect of reform on savings, investment and the growth of capital stock, as well as the technological-growth spillover effects of liberalisation. Again, their results are for global liberalisation and do not distinguish the impact of OECD liberalisation alone. 3 billion after a period of 15 years. These dynamic effects are clearly potentially more important than the effects from static resource reallocation. Unfortunately, their size depends 5.

Support to the cotton sector is not explicitly measured by OECD in its PSE work. But support to the cotton sector in OECD countries and elsewhere significantly undermines livelihoods and incomes in developing country cotton producers, as highlighted by the special attention given to the cotton initiative promoted by four West African countries (Benin, Burkina Faso, Chad and Mali) in the Doha Development Agenda. 55 million tonnes) in the 2001/02 season were 91% and between 144 and 184% higher than the world price, respectively.

If the expansion of exports brings previously unemployed or underemployed resources into production, then the export surplus gain will be much larger. AGRICULTURE AND DEVELOPMENT: THE CASE FOR POLICY COHERENCE – ISBN-92-64-01334-2 © OECD 2005 3. POLICY COHERENCE BETWEEN OECD COUNTRY AGRICULTURAL TRADE POLICIES… – 51 production costs, so that preferential access may undermine the longer-run competitiveness of these suppliers on world markets. For the countries directly affected by preference erosion, however, these general arguments are of little comfort.

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