China Agricultural Economic Review, Volume 7, Issue 1, February 2015.
Purpose This paper investigates the economic impacts of intra- and inter-regional water reallocation on sectoral transformation and economic growth. Design/methodology/approach A multi-sector, Ramsey-type growth model is fit to Chinese data and used to perform policy experiments. Findings An intra-regional water reallocation increases per-capita GDP by about 1.5% per year over the period 2000-2060. The aggregate potential welfare gain due to this reallocation is 1002.51 billion RMB. Transferring water from southern to northern China via the South-North Water Transfer Project, on average, has a negligible impact on per-capita GDP over the period 2000-2060, but aggregate welfare increases by 557.23 billion RMB. Combining intra-regional and inter-regional water reallocations, on average, increases per-capita GDP by 0.38% per year over the period and the aggregate welfare gain from this combination is 1148.06 billion RMB. Each policy scenario has implications for long-run regional production patterns: In an intra-regional reallocation scenario, Southern China produces almost 70% of aggregate GDP, in the inter-regional transfer it produces 58% of aggregate GDP, while in a combined intra/inter-regional reallocation it produces 55% of aggregate GDP. Originality/value This analysis can serve as a template for developing a useful planning tool that one can fit to national or regional data and use to examine a variety of policy relevant questions.
Purpose This paper investigates the economic impacts of intra- and inter-regional water reallocation on sectoral transformation and economic growth. Design/methodology/approach A multi-sector, Ramsey-type growth model is fit to Chinese data and used to perform policy experiments. Findings An intra-regional water reallocation increases per-capita GDP by about 1.5% per year over the period 2000-2060. The aggregate potential welfare gain due to this reallocation is 1002.51 billion RMB. Transferring water from southern to northern China via the South-North Water Transfer Project, on average, has a negligible impact on per-capita GDP over the period 2000-2060, but aggregate welfare increases by 557.23 billion RMB. Combining intra-regional and inter-regional water reallocations, on average, increases per-capita GDP by 0.38% per year over the period and the aggregate welfare gain from this combination is 1148.06 billion RMB. Each policy scenario has implications for long-run regional production patterns: In an intra-regional reallocation scenario, Southern China produces almost 70% of aggregate GDP, in the inter-regional transfer it produces 58% of aggregate GDP, while in a combined intra/inter-regional reallocation it produces 55% of aggregate GDP. Originality/value This analysis can serve as a template for developing a useful planning tool that one can fit to national or regional data and use to examine a variety of policy relevant questions.