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An Assessment of the Impact of Trade Liberalisation on Welfare in Pakistan: A General Equilibrium Analysis

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  • A. R. Kemal

    (Pakistan Institute of Development Economics, Islamabad.)

  • Rehana Siddiqui

    (Pakistan Institute of Development Economics, Islamabad.)

  • Rizwana Siddiqui

    (Pakistan Institute of Development Economics, Islamabad.)

  • M. Ali Kemal

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

Using Computable General Equilibrium Model, this paper assesses the impact of import liberalisation on macro aggregates and on the welfare of households. It uses benchmark data from Social Accounting Matrix for the year 1989-90 and simulates the impact of (i) removal of quota restrictions on imports of electric and non-electric equipment and transport equipment, (ii) reduction in import tariffs, and (iii) reduction in quota and tariff restriction in the presence of economic growth. The results of these simulation exercises indicate that reduction in quantitative restrictions on imports improves welfare of employees’ group of households in the urban areas. Welfare gain is the highest for the poorest group of households in the rural areas. Similarly, tariff reduction benefits employees more and (in the rural areas) than it does the medium-size landholders.

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File URL: http://www.pide.org.pk/Mimap/MIMAP16.pdf
File Function: First Version, 2003
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Bibliographic Info

Paper provided by Pakistan Institute of Development Economics in its series MIMAP Technical Paper Series with number 2003:16.

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Length: 42 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:pid:mimaps:2003:16

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References

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  1. Rashid Amjad & A.R. Kemal, 1997. "Macroeconomic Policies and their Impact on Poverty Alleviation in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(1), pages 39-68.
  2. Rizwana Siddiqui & Zafar Iqbal, 1999. "Social Accounting Matrix of Pakistan for 1989-90," PIDE-Working Papers 1999:171, Pakistan Institute of Development Economics.
  3. Wood, Adrian, 1998. "Globalisation and the Rise in Labour Market Inequalities," Economic Journal, Royal Economic Society, vol. 108(450), pages 1463-82, September.
  4. Francois, Joseph & Nelson, Doug R, 1998. "Trade, Technology and Wages: General Equilibrium Mechanics," CEPR Discussion Papers 1919, C.E.P.R. Discussion Papers.
  5. White, H., 1997. "The economic and social impact of adjustment in Africa : further empirical analysis," ISS Working Papers - General Series 18987, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  6. Moore, Mick & Leavy, Jennifer & Houtzager, Peter & White, Howard, 1999. "Polity qualities: how governance affects poverty," MPRA Paper 9467, University Library of Munich, Germany.
  7. Thorbecke, Erik & Berrian, David, 1992. "Budgetary rules to minimize societal poverty in a general equilibrium context," Journal of Development Economics, Elsevier, vol. 39(2), pages 189-205, October.
  8. Zafar Iqbal & Rizwana Siddiqui, 1998. "The Impact of Structural Adjustment on Income Distribution in Pakistan A SAM-based Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 377-397.
  9. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521319867.
  10. Decaluwe, B. & Patry, A. & Savard, L. & Thorbecke, E., 1999. "Poverty Analysis Within a General Equilibrium Framework," Cahiers de recherche 9909, Université Laval - Département d'économique.
  11. Hine, Robert C & Wright, Peter W, 1998. "Trade with Low Wage Economies, Employment and Productivity in UK Manufacturing," Economic Journal, Royal Economic Society, vol. 108(450), pages 1500-1510, September.
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Cited by:
  1. Butt, Muhammad Shoaib & Bandara, Jayatilleke S., 2008. "National and Regional Impacts of Increasing Non-Agricultural Market Access by Developing Countries – the Case of Pakistan," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 38(2), pages 277-311, September.

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