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Trade Liberalization and Spatial Inequality: a Methodological Innovation in a Vietnamese Perspective

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  • Henning Tarp Jensen
  • Finn Tarp

Abstract

The authors calibrate two static computable general-equilibrium (CGE) models with 16 and 5999 representative households. Aggregated and disaggregated household categories are consistently embedded in a 2000 social accounting matrix (SAM) for Vietnam, mapping on a one-to-one basis. Distinct differences in poverty assessments emerge when the impact of trade liberalization is analyzed in the two models. This highlights the importance of modeling micro-household behavior and related income and expenditure distributions endogenously within a static CGE model framework. The simulations indicate that poverty will rise following a revenue-neutral lowering of trade taxes. This is interpreted as a worst-case scenario, which suggests that the government should be proactive in combining trade liberalization measures with a pro-poor fiscal response to avoid increasing poverty in the short to medium term. Copyright United Nations University 2005.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 9 (2005)
Issue (Month): 1 (02)
Pages: 69-86

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Handle: RePEc:bla:rdevec:v:9:y:2005:i:1:p:69-86

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  1. Arndt, Channing & Jensen, Henning Tarp & Robinson, Sherman & Tarp, Finn, 1999. "Marketing margins and agricultural technology in Mozambique:," TMD discussion papers 43, International Food Policy Research Institute (IFPRI).
  2. Henning Tarp Jensen & Finn Tarp, 2005. "Trade Liberalization and Spatial Inequality: a Methodological Innovation in a Vietnamese Perspective," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 69-86, 02.
  3. Decaluwe, B. & Patry, A. & Savard, L. & Thorbecke, E., 1999. "Poverty Analysis Within a General Equilibrium Framework," Papers 9909, Laval - Recherche en Politique Economique.
  4. Arndt, Channing & Robinson, Sherman & Tarp, Finn, 1999. "Parameter estimation for a computable general equilibrium model: a maximum entropy approach," TMD discussion papers 40, International Food Policy Research Institute (IFPRI).
  5. Golan, Amos & Judge, George & Robinson, Sherman, 1994. "Recovering Information from Incomplete or Partial Multisectoral Economic Data," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 541-49, August.
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Cited by:
  1. Mamoon, Dawood, 2007. "How May International Trade affect Poverty in a Developing Country Setup? The Inequality Channel," MPRA Paper 2716, University Library of Munich, Germany.
  2. Nguyen, Anh & Jones, Nicola, 2006. "Vietnam’s Trade Liberalisation: Potential Impacts on Child Well-being," MPRA Paper 1385, University Library of Munich, Germany.
  3. Abbott, Philip & Bentzen, Jeanet & Huong, Thi Lan & Tarp, Finn, 2007. "A Critical Review of Studies on the Social and Economic Impacts of Vietnam’s International Economic Integration," MPRA Paper 29789, University Library of Munich, Germany.
  4. Tarp Jensen, Henning & Tarp, Finn, 2004. "Trade Liberalization and Spatial Inequality: A Methodological Innovation in Vietnamese Perspective," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Jones, Nicola & Nguyen, Ngoc Anh & Nguyen, Thu Hang, 2007. "Trade liberalisation and intra-household poverty in Vietnam: a q2 social impact analysis," MPRA Paper 4206, University Library of Munich, Germany.
  6. Mustafa Babiker, . "Impacts of Public Policy on Poverty in Arab Countries:Review of the CGE Literature," API-Working Paper Series 0403, Arab Planning Institute - Kuwait, Information Center.
  7. Kanbur, Ravi & Venables, Anthony J., 2005. "SPATIAL INEQUALITY AND DEVELOPMENT Overview of UNU-WIDER Project," Working Papers 127127, Cornell University, Department of Applied Economics and Management.
  8. Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex.
  9. Hertel, Thomas & Keeney, Roman & Ivanic, Maros & Winters, Alan, 2006. "Distributional Effects of WTO Agricultural Reforms in Rich and Poor Countries," GTAP Working Papers 2185, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  10. Thi Cam Van Cao & Takahiro Akita, 2008. "Urban and Rural Dimensions of Income Inequality in Vietnam," Working Papers EMS_2008_04, Research Institute, International University of Japan.
  11. Nguyen, Hoa & Grote, Ulrike, 2004. "Agricultural policies in Vietnam," MTID discussion papers 79, International Food Policy Research Institute (IFPRI).
  12. Pieters, Janneke, 2010. "Growth and Inequality in India: Analysis of an Extended Social Accounting Matrix," World Development, Elsevier, vol. 38(3), pages 270-281, March.
  13. Channing Arndt & Sherman Robinson & Finn Tarp, 2006. "Trade Reform and Gender in Mozambique," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 73-89.
  14. Kundu, Amitabh, 2009. "Urbanisation and Migration: An Analysis of Trends, Patterns and Policies in Asia," MPRA Paper 19197, University Library of Munich, Germany.
  15. Jensen, Tarp & Tarp, Finn, 2007. "Agricultural Technology and Marketing Margins in Vietnam," MPRA Paper 29820, University Library of Munich, Germany.

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