Regionalization and foot-and-mouth disease control in South America: Lessons from spatial models of coordination and interactions

Regulatory interventions to control animal diseases, such as foot-and-mouth-disease (FMD), can yield substantial economic benefits to regions with large livestock sectors. However, because disease vectors span national borders, the full benefits of regulation can only be achieved through international coordination. Divergent incentives between large-scale operations producing for export and smallholders producing for subsistence or local markets may mitigate coordination of control efforts. A series of spatial games are used to characterize these types of regional externalities. Results suggest that promoting investments in market development in lagging regions may have the greatest potential for eradicating the disease.