How Does Vietnam's Accession to the World Trade Organization Change the Spatial Incidence of Poverty?
AbstractTrade policies can promote aggregate e?ciency, but the ensuing structural adjustments generally create both winners and losers. From an incomes perspective, trade liberalization can raise GDP per capita, but rates of emergence from poverty depend upon individual household characteristics of economic participation and asset holding. To fully realize the growth potential of trade, while limiting the risk of rising inequality, policies need to better account for microeconomic heterogeneity. One approach to this is the geographic targeting, which shifts resources to poor areas. This study combines an integrated microsimulation-CGE model with the small area estimation to evaluate the spatial incidence of Vietnam's accession to the WTO. Provincial-level poverty reduction after full liberalization was heterogeneous, ranging from 2.2 per cent to 14.3 per cent. Full liberalization will bene?t the poor on a national basis, but the northwestern area of Vietnam is likely to lag behind. Furthermore, poverty can be shown to increase under comparable scenarios.
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Bibliographic InfoPaper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper RP2007/12.
Length: 42 pages
Date of creation: 2007
Date of revision:
trade liberalization; microsimulation; computable general equilibrium; small-area estimation; Vietnam;
Other versions of this item:
- Fujii, Tomoki & Roland-Holst, David, 2008. "How does Vietnam's accession to the World Trade Organization change the spatial incidence of poverty?," Policy Research Working Paper Series 4521, The World Bank.
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