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Globalization and Poverty in Senegal: A Worst Case Scenario?

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  • Miet Maertens
  • Liesbeth Colen
  • Johan F.M. Swinnen

Abstract

There is no consensus about how globalization -trade and foreign investments ?affects poverty reduction. Using household survey data, this study contributes to the empirical literature on globalization and poverty by analyzing the household-level implications of increased foreign investments and trade in the horticulture sector in Senegal. In many aspects this represents what many would consider a "worst-case scenario? Stringent rich country standards are imposed on exports and the supply chain is controlled by a single multinational company with extreme levels of supply base consolidation and vertical integration and complete exclusion of smallholder suppliers. We analyze and quantify income and poverty effects under these "worst-case conditions?and find significant positive welfare impacts through employment creation and labor market participation.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 21708.

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Date of creation: 2008
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Handle: RePEc:lic:licosd:21708

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Keywords: trade; FDI; poverty; vertical coordination; modern supply chains;

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