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The impact of trade openness on regional inequality : the cases of India and Brazil

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  • Marie Daumal

    ()
    (Université Paris 8 Vincennes-Saint-Denis, Université Paris-Dauphine, LEDa, UMR DIAL)

Abstract

Regional inequalities are large in India and Brazil and represent a development challenge. This paper aims to determine whether regional disparities are linked to countries’ trade openness. An annual indicator of regional inequalities is constructed for India over the period 1980-2003 and for Brazil over 1985-2003. Results from time series regressions show that Brazil’s trade openness contributes to the reduction in regional inequalities in Brazil. The opposite result is found for India. India’s trade openness is an important factor aggravating income inequality among Indian states. In both countries, the inflows of foreign direct investment are found to increase regional disparities. _________________________________ Dans les années 90, les inégalités régionales ont fortement augment´e en Inde. Les inégalités entre Etats brésiliens sont importantes et constituent un problème politique majeur pour la fédération brésilienne. En 1991, ces deux pays se sont progressivement ouverts au commerce international. L’objectif du papier est de déterminer s’il existe ou non un lien entre les inégalités régionales et l’ouverture commerciale dans les cas de l’Inde et du Brésil. J’ai construit un indicateur, l’index Gini, qui est une mesure des inégalités régionales, sur la période 1980-2004 pour l’Inde et sur la période 1985-2004 pour le Brésil. Cet indicateur des inégalités régionales est ensuite régressé sur divers déterminants dont l’ouverture commerciale des pays, en utilisant la technique des séries temporelles et des modèles vectoriels à correction d’erreur. Je trouve que l’ouverture commerciale de l’Inde a fortement aggravé les inégalités existant entre l’Inde du Nord, de plus en plus pauvre, et l’Inde du Sud de plus en plus riche. Or ces inégalités régionales croissantes sont maintenant une source de tension et de conflits au sein de la fédération indienne, les Etats du Sud ne voulant plus “payer” pour le Nord du pays. Au contraire, l’ouverture du Brésil semble avoir entraîné une diminution des inégalités entre Etats brésiliens.

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Bibliographic Info

Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2010/04.

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Length: 28 pages
Date of creation: Feb 2010
Date of revision:
Handle: RePEc:dia:wpaper:dt201004

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Keywords: Trade openness; regional inequality; India; Brazil; time series regression; Ouverture commerciale; inégalités régionales; Inde; Brésil; séries temporelles.;

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References

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  1. Peter Nunnenkamp & Rudi Stracke, 2008. "Foreign Direct Investment In Post-Reform India: Likely To Work Wonders For Regional Development?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(2), pages 55-84, December.
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Cited by:
  1. Maria Cecilia J. LUSTOSA & Yves-André FAURE, 2013. "Changements institutionnels et politiques publiques au Brésil\r\nAux sources de la réduction des inégalités sociales, de la pauvreté et des disparités régionales," Cahiers du GREThA 2013-25, Groupe de Recherche en Economie Théorique et Appliquée.
  2. Abhimanyu Dadu & Namrata Gulati, 2014. "Inequality, neighborhoods and variation in prices," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-001, Indira Gandhi Institute of Development Research, Mumbai, India.

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