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Presented is an examination of the relationship between agricultural policies & development by means of a dynamically recursive, computable general equilibrium model applied to Sri Lanka. The static model used employs 15 variables & 15 parameters. The variables are: (1) sectoral gross output, (2) sectoral use of unskilled labor, (3) economy-wide supply of unskilled labor, (4) economy-wide wage for unskilled labor, (5) sectoral factor wages, (6) consumer price indexes by labor & household type, (7) producer price, producer net price, consumer price, & international price, (8) total income & average household expenditure, (9) number of standardized households per consumer group, (10) per capita household sectoral consumption, (11) sectoral exports & imported sectoral private consumption, (12) total government revenue & current expenditure, (13) public savings, (14) exchange rate, & (15) fixed balance of trade surplus international prices. The 15 paramaters are (A) output elasticities, (B) labor effort, (C) supply elasticity for unskilled labor, (D) per household LF participation rate by consumer group, (E) intermediate output coefficients, (F) consumer tax, consumer tariff, & export tax, (G) sectoral wage differentials, (H) share in sectoral factor income by consumer group, (I) savings rate by consumer group, (J) share of sectoral private consumption imported, (K) trade constant & elasticity, (L) subsistence minima for spliced LES, (M) marginal budget shared for rich & poor, (N) government expenditure shares, & (O) sectoral investment demand share. The agricultural policies investigated include elimination of the rice subsidy, elimination of the export tax, land reform, increased investment in agriculture, & technical change in agriculture. The goals considered are the levels & growth rates of GNP & employment, the distribution of income, & the real income level of the lowest income group. The study provides a quantitative assessment of the association between policies & goals. The key economic mechanisms identified in this association were physical capital accumulation, employment growth, & the rate of technical change. 4 Tables. Appendixes. Modified HA.

This article takes an integrated approach to evaluating the interaction of initial conditions, political change, reforms and economic performance in a unified framework covering 28 transition economies in East Asia, Central and Eastern Europe, and the Former Soviet Union (FSU). Initial conditions and economic policy jointly determine the large differences in economic performance among transition economies. Initial conditions dominate in explaining inflation, but economic liberalization is the most important factor determining differences in growth. Political reform emerges as the most important determinant of the speed and comprehensiveness of economic liberalization, raising the important question of what determines political liberalization. Results suggest the importance of the level of development in determining the decision to expand political freedoms.