Resource information
The paper uses a bi-regional CGE model to assess the potential impacts of analternative rural development policy design, which is more targeted to public sectorinvestments on the economic activity of a lagging region in Latvia. The results showthe distribution of effects between the rural and urban areas within the region as wellas differences in the impacts between the three policy scenarios that are explored. Allscenarios generate positive effects in the economy. However, the “Investment inPublic Sector with enhanced envelope” scenario is the one that leads to the largestimpacts in the economy. The “Investment in Public Sector with no envelope” is thesecond best scenario and has better effects compared to the Scenario that hasenhanced financial envelope but with no reallocation. Overall, the results suggest thatit’s not only enhanced funding that will improve economic performance in aneconomy but also the targeting of these funds to the more productive sectors of theeconomy that have the highest linkages within the economy and consequently thepotential to create strong direct and indirect effects spread to the regional economy.
paper from session A
