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Trade, Growth, and Poverty

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  • Andrew Berg
  • Anne O. Krueger

Abstract

This survey of the recent literature asks: how important is trade policy for poverty reduction? We consider the effects of openness on poverty in two components: the effect of openness on average income growth, and the effect on distribution for a given growth rate. Evidence from a variety of sources (cross-country and panel growth regressions, industry and firm-level research, and case studies) supports the view that trade openness contributes greatly to growth. Moreover, trade openness does not have systematic effects on the poor beyond its effect on overall growth. Trade policy is only one of many determinants of growth and poverty reduction. Trade openness has important positive spillovers on other aspects of reform, however, so that the correlation of trade with other pro-reform policies speaks to the advantages of making openness a primary part of the reform package.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/30.

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Length: 51
Date of creation: 01 Feb 2003
Date of revision:
Handle: RePEc:imf:imfwpa:03/30

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Related research

Keywords: Trade; Poverty; Income distribution; Economic growth; Protectionism; trade liberalization; tariff rates; trade openness; average tariff; trade reform; trading partners; per capita income; export market; average tariff rates; endogenous growth; black market premium; open economies; international trade; nontariff barriers; tariff rate; export performance; export marketing; export markets; export sector; trade policies; trade barriers; free trade; trade liberalizations; exporters; tariff reductions; openness measure; export bias; trade volumes; trade protection; anti-export bias; import competition; trade opening; export growth; export subsidies; foreign trade; open trade; changes in trade; trade share; global integration; import substitution; nontariff measures; exporting firms; closed economies; income convergence; average tariffs; world trade; factor accumulation; trade shocks; economic downturns; international standards; export promotion; average incomes; agricultural trade; economic liberalization; trade regimes; exchange rate policies; black market premia; tariff categories; endogenous growth theory; domestic firms; factor endowments; terms of trade; tariff reform; imported inputs; import penetration; trade reforms; trade growth; tariff structures; dynamic gains; trade regime; trade flows; average tariff rate; domestic goods; economic integration; tariff revenue; total exports; trade figures; share of exports; trade intensity; free trade arrangements; export activity; trade volume; external protection; transport costs; trading regime; trade policy issues; domestic prices; world trade organization; trade policy reform; world economy; terms of trade shocks; balance of payments crises; trade data; measure of trade; export tariffs; nontariff barrier; import substitution policies; open trade policies; antidumping actions; skilled workers; factor markets; economic community; market exchange rates; dynamic effects; trading partner; capital accounts; political economy; trade arrangements; multinational corporations; bilateral trade; tariff reduction; price liberalization; poverty alleviation; trade components; bilateral tariffs; exporter; open trade regime; exchange rate depreciation; liberalization of trade; current account deficit; imported intermediate; rent-seeking behavior; unskilled labor; effects of trade liberalization; trade restrictions; balance of payments; domestic industry; financial crises; export behavior;

References

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