STRUCTURAL ADJUSTMENT AND AGRICULTURAL EXPORT RESPONSE IN LATIN AMERICA

WP 1994-09 August 1994Expanding exports has been one of the principal goals of structural adjustment programs aimed at restoring external balance of payments equilibria in many developing countries. This paper analyzes the changing responsiveness of agricultural exports to price and exchange rate variation for selected crops in eight Latin American countries over the period 1961-1990. The results show that: (1) commodity and country disaggregation in estimation generates much higher export response elasticities than previously estimated; (2) real exchange rate changes dominate price changes in stimulating export response; and (3) statistical tests confirm structural change in export response elasticities in over half of the equations estimated. Overall, the evidence suggests that price and exchange rate changes accompanying stabilization and adjustment reforms have had significant though non-uniform effects in stimulating agricultural export expansion in Latin America