S. Levy et S. Vanwijnbergen, TRANSITION PROBLEMS IN ECONOMIC-REFORM - AGRICULTURE IN THE NORTH-AMERICAN FREE-TRADE AGREEMENT, The American economic review, 85(4), 1995, pp. 738-754
How fast should Mexican agriculture be incorporated into the North Ame
rican Free Trade Agreement? We focus on the implications for policy de
sign of the absence of efficient capital markets, on the welfare costs
of reforming gradually, on incentive problems created by trade adjust
ment policies, and on the redistributive aspects of policy reform-all
transitional problems that arise in most economic reforms. A key consi
deration is that adjustment should focus on increasing the value of th
e assets owned by the groups affected, and not on direct income transf
ers or programs targeted on characteristics controlled by the benefici
aries.