| Sumario: | A study was conducted to investigate the economy-wide gains that could be obtained in Morocco by allocating surface irrigation water to its most productive use and to assess a decentralized method for achieving this outcome in a spatially heterogeneous environment. Findings revealed that a decentralized water trading mechanism could boost Morocco's agricultural output by 8.3 percent and influence the rental rates of other agricultural inputs at the national level. Results also demonstrated that such a mechanism could have economy-wide effects that would entail growth in aggregate consumption, a decline in the cost of living, and an expansion of international trade.
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