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Globalization and Complementary Policies: Poverty Impacts on Rural Zambia

In: Globalization and Poverty

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  • Jorge F. Balat
  • Guido G. Porto

Abstract

In this paper, we have two main objectives: to investigate the links between globalization and poverty observed in Zambia during the 1990s, and to explore the poverty impacts of non-traditional export growth. We look at consumption and income effects separately. On the consumption side, we study the maize marketing reforms and the elimination of maize subsidies. We find that complementary policies matter: the introduction of competition policies at the milling industry acted as a cushion that benefited consumers but the restriction on maize imports by small-scale mills hurt them. On the income side, we study agricultural export growth to estimate income gains from international trade. The gains are associated with market agriculture activities (such as growing cotton, tobacco, hybrid maize) and rural labor markets and wages. We find that by expanding trade opportunities Zambian households would earn significantly higher income. Securing these higher levels of well-being requires complementary policies, like the provision of infrastructure, credit, and extension services.

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This chapter was published in:

  • Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 0115.

    Handle: RePEc:nbr:nberch:0115

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    1. Deaton, A., 1990. "Price Elasticities From Surveys Data: Extensions And Indonesian Results," Papers 69, World Bank - Living Standards Measurement.
    2. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
    3. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
    4. Neil McCulloch & Bob Baulch & Milasoa Cherel-Robson, 2000. "Poverty, Inequality and Growth in Zambia during the 1990s," Econometrics 0004004, EconWPA.
    5. Brambilla, Irene & Porto, Guido, 2005. "Farm Productivity and Market Structure: Evidence from Cotton Reforms in Zambia," Working Papers 5, Yale University, Department of Economics.
    6. Porto, Guido G., 2004. "Informal export barriers and poverty," Policy Research Working Paper Series 3354, The World Bank.
    7. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
    8. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
    9. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
    10. Julie Litchfield & Neil McCulloch, 2003. "Poverty in Zambia: Assessing the Impacts of Trade Liberalisation in the 1990s," PRUS Working Papers 16, Poverty Research Unit at Sussex, University of Sussex.
    11. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
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    Cited by:
    1. Christian K.M. Kingombe, 2012. "The Linkage between Outcome Differences in Cotton Production and Rural Roads Improvements - A Matching Approach," IHEID Working Papers 12-2012, Economics Section, The Graduate Institute of International Studies.
    2. Irene Brambilla & Guido G. Porto, 2011. "Market structure, outgrower contracts, and farm output. Evidence from cotton reforms in Zambia," Oxford Economic Papers, Oxford University Press, vol. 63(4), pages 740-766, December.
    3. Caroline Harper & Nicola Jones & Andy McKay, 2010. "Including Children in Policy Responses to Economic Crises," Working papers 1003, UNICEF,Division of Policy and Strategy.
    4. Ann Harrison, 2006. "Globalization and Poverty," NBER Working Papers 12347, National Bureau of Economic Research, Inc.
    5. Nicholas M. Odhiambo, 2010. "Financial deepening and poverty reduction in Zambia: an empirical investigation," International Journal of Social Economics, Emerald Group Publishing, vol. 37(1), pages 41-53, January.
    6. Bokosi, Fanwell Kenala, 2008. "SELLING OUR WAY INTO POVERTY: The Commercialisation of Poverty in Malawi," MPRA Paper 7087, University Library of Munich, Germany.
    7. Irene Brambilla & Guido G. Porto, 2005. "Farm Productivity and Market Structure. Evidence From Cotton Reforms in Zambia," Working Papers 919, Economic Growth Center, Yale University.
    8. Christian K.M. Kingombe and Salvatore di Falco, 2012. "The Impact of a Feeder Road Project on Cash Crop Production in Zambia’s Eastern Province between 1997 and 2002," IHEID Working Papers 04-2012, Economics Section, The Graduate Institute of International Studies, revised 28 Feb 2012.
    9. Aisbett, Emma & Harrison, Ann & Zwane, Alix, 2006. "Globalization and poverty: what is the evidence?," MPRA Paper 36595, University Library of Munich, Germany.
    10. Arne Wiig, 2009. "Aid for trade: A misdirected initiative?," CMI Working Papers 4, CMI (Chr. Michelsen Institute), Bergen, Norway.
    11. Balat, Jorge F. & Porto, Guido G., 2005. "The WTO Doha Round, cotton sector dynamics, and poverty trends in Zambia," Policy Research Working Paper Series 3697, The World Bank.
    12. Ann Harrison & Margaret McMillan, 2007. "On the links between globalization and poverty," Journal of Economic Inequality, Springer, vol. 5(1), pages 123-134, April.
    13. Robinson, Peter & Govereh, Jones & Ndlela, Daniel, 2007. "Distortions to Agricultural Incentives in Zambia," Agricultural Distortions Working Paper 48516, World Bank.
    14. Christian K.M. Kingombe, 2012. "Regional Analysis of Eastern Province Feeder Road Project - District level estimation of the Poverty Alleviation Effects of Rural Roads Improvements in Zambia’s Eastern Province," IHEID Working Papers 10-2012, Economics Section, The Graduate Institute of International Studies.
    15. Diop, Ndiame & Brenton, Paul & Asarkaya, Yakup, 2005. "Trade costs, export development, and poverty in Rwanda," Policy Research Working Paper Series 3784, The World Bank.

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