The measurement of the level of support in selected non-OECD countries

Since the beginning of the 1990s, the OECD has been progressively applying its PSE/CSE analysis to transition economies. This paper presents the PSE/CSE estimates for seven monitored countries, Bulgaria, Estonia, Latvia, Lithuania, Romania, Russia, and Slovenia. It then focuses on the practical aspects of estimating support, including the comparison of domestic and international prices, measurement of budgetary transfers, and calculation of country aggregates. For each aspect, an attempt is made to present the basic methodological approach and to highlight empirical estimation issues relating to transition economies. Finally, some aspects related to the interpretation of support estimates for transition economies are discussed. PSEs/CSEs have proved to be useful tools for monitoring developments in the agricultural sectors of non-OECD economies. These measures help explain the scale of agricultural market distortions and the cost of these distortions to consumers and taxpayers. PSEs/CSEs are indicative of the need for reform and areas where it is critical. However, the PSE needs to be complemented by other analytical instruments, in particular those estimating the various effects of policies applied.