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A Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe

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  • Margaret Chitiga

    ()
    (Department of Economics, University of Pretoria)

  • Ramos Mabugu

    ()
    (Centre for Environmental Economics and Policy in Africa, Department of Agricultural Economics, University of Pretoria)

  • Tonia Kandiero

    ()
    (National Treasury)

Abstract

The paper uses a micro-simulation computable general equilibrium (CGE) model to study the impact on poverty of a complete removal of tariffs in Zimbabwe. The model incorporates 14006 households derived from the 1995 Poverty Assessment Study Survey. This paper’s novelty is that it is one among a small group of papers that incorporates individual households in the CGE model as opposed to having representative households. Using individual households allows for a comprehensive analysis of poverty. The complete removal of tariffs favours exporting sectors. Poverty falls in the economy while inequality hardly changes. The results differ between rural and urban areas.

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Bibliographic Info

Paper provided by University of Pretoria, Department of Economics in its series Working Papers with number 200715.

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Length: 35 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:pre:wpaper:200715

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Keywords: Computable General Equilibrium; Trade Liberalisation; Micro-simulation; Poverty; Inequality;

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References

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  1. John Cockburn, 2002. "Trade Liberalisation and Poverty in Nepal: A Computable General Equilibrium Micro Simulation Analysis," CSAE Working Paper Series 2002-11, Centre for the Study of African Economies, University of Oxford.
  2. Davies, Rob & Rattso, Jorn & Torvik, Ragnar, 1994. "The Macroeconomics of Zimbabwe in the 1980s: A CGE-Model Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 3(2), pages 153-98, October.
  3. Piggott,John & Whalley,John, 2009. "UK Tax Policy and Applied General Equilibrium Analysis," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521104593.
  4. Reimer, Jeffrey J., 2002. "Estimating the Poverty Impacts of Trade Liberalization," GTAP Working Papers 1163, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  5. Winters, L. Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2382, C.E.P.R. Discussion Papers.
  6. Decaluwé, Bernard & Dumont, Jean-Christophe & Savard, Luc, 2000. "Measuring Poverty and Inequality in a Computable General Equilibrium Model," Cahiers de recherche, Université Laval - Département d'économique 9926, Université Laval - Département d'économique.
  7. Ramkishen Rajan & Graham Bird, 2002. "Trade Liberalization and Poverty: Where Do We Stand?," Centre for International Economic Studies Working Papers, University of Adelaide, Centre for International Economic Studies 2002-30, University of Adelaide, Centre for International Economic Studies.
  8. Cogneau, Denis & Robilliard, Anne-Sophie, 2000. "Growth, distribution and poverty in Madagascar," TMD discussion papers, International Food Policy Research Institute (IFPRI) 61, International Food Policy Research Institute (IFPRI).
  9. Stifel, David C. & Thorbecke, Erik, 2003. "A dual-dual CGE model of an archetype African economy: trade reform, migration and poverty," Journal of Policy Modeling, Elsevier, Elsevier, vol. 25(3), pages 207-235, April.
  10. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 42(1), pages 72-115, March.
  11. Rattso, Jorn & Torvik, Ragnar, 1998. "Zimbabwean Trade Liberalisation: Ex Post Evaluation," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 22(3), pages 325-46, May.
  12. Bautista, Romeo M. & Lofgren, Hans & Thomas, Marcelle, 1998. "Does trade liberalization enhance income growth and equity in Zimbabwe?: the role of complimentary policies," TMD discussion papers, International Food Policy Research Institute (IFPRI) 32, International Food Policy Research Institute (IFPRI).
  13. Luc Savard, 2005. "Poverty and Inequality Analysis within a CGE Framework: A Comparative Analysis of the Representative Agent and Microsimulation Approaches," Development Policy Review, Overseas Development Institute, Overseas Development Institute, vol. 23(3), pages 313-331, 05.
  14. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, Econometric Society, vol. 52(3), pages 761-66, May.
  15. Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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Citations

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Cited by:
  1. Chala, Zelalem T. & Norton, George W. & Grant, Jason H., 2010. "Economic Significance of Specific Export Promotion on Poverty Reduction and Inter- Industry Growth of Ethiopia," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado, Agricultural and Applied Economics Association 61739, Agricultural and Applied Economics Association.
  2. Kebede, Sindu & Fekadu, Belay & Aredo, Dejene, 2011. "Trade Liberalization and Poverty: A Macro-Micro Analysis in Ethiopia," Proceedings of the German Development Economics Conference, Berlin 2011, Verein für Socialpolitik, Research Committee Development Economics 44, Verein für Socialpolitik, Research Committee Development Economics.
  3. Acharya, Sanjaya & Cohen, Solomon, 2008. "Trade liberalisation and household welfare in Nepal," Journal of Policy Modeling, Elsevier, Elsevier, vol. 30(6), pages 1057-1060.
  4. Mahofa, Godfrey, 2007. "Economic Analysis of Factors Affecting Cotton Production In Zimbabwe," Research Theses, Collaborative Masters Program in Agricultural and Applied Economics 134490, Collaborative Masters Program in Agricultural and Applied Economics.
  5. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, Elsevier, vol. 45(2), pages 60-71, June.

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