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Looking Beyond Averages in the Trade and Poverty Debate

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  • Ravallion, Martin

Abstract

There has been much debate about how much poor people in developing countries gain from trade openness, as one aspect of ‘globalization’. The paper views the issue through both ‘macro’ and ‘micro’ empirical lenses. The macro lens uses cross-country comparisons and aggregate time series data; the micro lens uses household-level data combined with structural modelling of the impacts of specific trade reforms. Case studies are presented for China and Morocco. Both the macro and micro approaches cast doubt on some widely heard generalizations from both sides of the globalization debate. Additionally the micro lens indicates considerable heterogeneity in the welfare impacts of trade openness, with both gainers and losers among the poor. A number of covariates of the individual gains are identified. The results point to the importance of combining trade reforms with well-designed social protection policies. [Research Paper No. 2005/29]

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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2005/29.

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Length: 30 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:unu:wpaper:rp2005-29

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Keywords: trade; globalization; poverty; inequality; China; Morocco;

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References

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  1. Dwayne Benjamin & Loren Brandt & John Giles, 2004. "The Evolution of Income Inequality in Rural China," William Davidson Institute Working Papers Series 2004-654, William Davidson Institute at the University of Michigan.
  2. John Cockburn, 2002. "Trade Liberalisation and Poverty in Nepal A Computable General Equilibrium Micro Simulation Analysis," Economics Series Working Papers WPS/2002-11, University of Oxford, Department of Economics.
  3. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
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  7. Gaurav Datt & Martin Ravallion, 1998. "Farm productivity and rural poverty in India," Journal of Development Studies, Taylor & Francis Journals, vol. 34(4), pages 62-85.
  8. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-98, March.
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Citations

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Cited by:
  1. Yin Zhang & Guanghua Wan, 2006. "Globalization and the Urban Poor in China," Dundee Discussion Papers in Economics 196, Economic Studies, University of Dundee.
  2. Rios, Ana R. & Shively, Gerald E. & Masters, William A., 2009. "Agricultural Prices and Income Distribution among Farmers: A Whole-Household, Multi-Country, Multi-Year Analysis," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49314, Agricultural and Applied Economics Association.
  3. Aksoy , M. Ataman & Isik-Dikmelik, Aylin, 2008. "Are low food prices pro-poor ? net food buyers and sellers in low-income countries," Policy Research Working Paper Series 4642, The World Bank.
  4. Prema-chandra Athukorala, 2010. "Trade Liberalisation and The Poverty of Nations: A Review Article," Departmental Working Papers 2010-01, The Australian National University, Arndt-Corden Department of Economics.
  5. Driouchi, Ahmed, 2009. "Failure of Participation & “Missing Women” in South Mediterranean Economies," MPRA Paper 21541, University Library of Munich, Germany, revised 22 Mar 2010.
  6. Bergh, Andreas & Nilsson, Therese, 2009. "Good for Living? On the Relation between Globalization and Life Expectancy," Ratio Working Papers 136, The Ratio Institute.
  7. Ann Harrison, 2006. "Globalization and Poverty," NBER Working Papers 12347, National Bureau of Economic Research, Inc.
  8. Arne Wiig, 2009. "Aid for trade: A misdirected initiative?," CMI Working Papers 4, CMI (Chr. Michelsen Institute), Bergen, Norway.
  9. Liang, Zhicheng, 2006. "Threshold Estimation on the Globalization-Poverty Nexus: Evidence from China," Working Paper Series RP2006/57, World Institute for Development Economic Research (UNU-WIDER).
  10. Michael Tribe & Andrew Sumner, 2006. "Development economics at a crossroads? Introduction to a policy arena," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(7), pages 957-966.
  11. Margaret McMillan & Alix Peterson Zwane & Nava Ashraf, 2005. "My Policies or Yours: Does OECD Support for Agriculture Increase Poverty in Developing Countries?," NBER Working Papers 11289, National Bureau of Economic Research, Inc.
  12. Chris Papageorgiou & Subir Lall & Florence Jaumotte, 2008. "Rising Income Inequality," IMF Working Papers 08/185, International Monetary Fund.

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