摘要：The paper uses a bi-regional CGE model to assess the potential impacts of an alternative rural development policy design, which is more targeted to public sector investments on the economic activity of a lagging region in Latvia. The results show the distribution of effects between the rural and urban areas within the region as well as differences in the impacts between the three policy scenarios that are explored. All scenarios generate positive effects in the economy. However, the “Investment in Public Sector with enhanced envelope” scenario is the one that leads to the largest impacts in the economy. The “Investment in Public Sector with no envelope” is the second best scenario and has better effects compared to the Scenario that has enhanced financial envelope but with no reallocation. Overall, the results suggest that it’s not only enhanced funding that will improve economic performance in an economy but also the targeting of these funds to the more productive sectors of the economy that have the highest linkages within the economy and consequently the potential to create strong direct and indirect effects spread to the regional economy.
关键词：lagging rural areas;bi-regional CGE model;rural development policy;CAP
