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Pro-poor trade policy in Sub-Saharan Africa

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  • Nicita, Alessandro
  • Olarreaga, Marcelo
  • Porto, Guido

Abstract

This paper examines the presence of a pro-poor bias in the existing structure of protection of six Sub-Saharan African (SSA) countries, Burkina Faso, Cameroon, Côte d'Ivoire, Ethiopia, Gambia, and Madagascar. We build on a simple agricultural household production model and we propose an extension to include adjustments in labor income. Our approach, which can be implemented without repeated cross-sections of household level data, suits well the data constraints in SSA. It also allows us to capture the heterogeneity in trade protection at the tariff line level. The pro-poor bias indicators suggest that SSA's trade policies tend to be biased in favor of poor households, as these policies redistribute income from rich to poor households. This is because protection increases the agricultural prices of goods that are sold by African households and this effect dominates both the impacts of higher consumption prices and the strong Stolper–Samuelson effects that benefit skilled over unskilled workers.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 92 (2014)
Issue (Month): 2 ()
Pages: 252-265

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Handle: RePEc:eee:inecon:v:92:y:2014:i:2:p:252-265

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Web page: http://www.elsevier.com/locate/inca/505552

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Keywords: Trade policy; Wage elasticities; Poverty; Sub-Saharan Africa;

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