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How Does Vietnam's Accession to the World Trade Organization Change the Spatial Incidence of Poverty?

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Author Info
Fujii, Tomoki
Roland-Holst, David

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Abstract

Trade 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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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper RP2007/12.

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Length: 42 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:unu:wpaper:rp2007-12

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Related research
Keywords: trade liberalization; microsimulation; computable general equilibrium; small-area estimation; Vietnam;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Minot, Nicholas, 2000. "Generating Disaggregated Poverty Maps: An Application to Vietnam," World Development, Elsevier, vol. 28(2), pages 319-331, February. [Downloadable!] (restricted)
  2. Krueger, Anne O, 1998. "Why Trade Liberalisation Is Good for Growth," Economic Journal, Royal Economic Society, vol. 108(450), pages 1513-22, September. [Downloadable!] (restricted)
  3. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
    Other versions:
  4. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March. [Downloadable!] (restricted)
  5. Emiko Fukase & Will Martin, 2000. "The effects of the United States granting MFN status to Vietnam," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 539-559, 09. [Downloadable!] (restricted)
  6. Kanbur, Ravi, 2001. "Economic Policy, Distribution and Poverty: The Nature of Disagreements," World Development, Elsevier, vol. 29(6), pages 1083-1094, June. [Downloadable!] (restricted)
  7. Finn Tarp & David Roland-Holst & John Rand, 2002. "Trade and Income Growth in Vietnam: Estimates from a New Social Accounting Matrix," Economic Systems Research, Taylor and Francis Journals, vol. 14(2), pages 157-184, June. [Downloadable!] (restricted)
  8. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September. [Downloadable!] (restricted)
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  9. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  10. Jagdish Bhagwati & T. N. Srinivasan, 2002. "Trade and Poverty in the Poor Countries," American Economic Review, American Economic Association, vol. 92(2), pages 180-183, May. [Downloadable!]
  11. Henning Tarp Jensen & Finn Tarp, 2005. "Trade Liberalization and Spatial Inequality: a Methodological Innovation in a Vietnamese Perspective," Review of Development Economics, Blackwell Publishing, vol. 9(1), pages 69-86, 02. [Downloadable!] (restricted)
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  12. L. Alan Winters, 2002. "Trade Liberalisation and Poverty: What are the Links?," The World Economy, Blackwell Publishing, vol. 25(9), pages 1339-1367, 09. [Downloadable!] (restricted)
  13. Rhys Jenkins, 2004. "Vietnam in the global economy: trade, employment and poverty," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 13-28. [Downloadable!]
  14. Harrison, Glenn W. & Rutherford, Thomas F. & Tarr, David G., 2003. "Trade liberalization, poverty and efficient equity," Journal of Development Economics, Elsevier, vol. 71(1), pages 97-128, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jones, Nicola & Nguyen, Ngoc Anh & Nguyen, Thu Hang, 2007. "Trade liberalisation and intra-household poverty in Vietnam: a q2 social impact analysis," MPRA Paper 4206, University Library of Munich, Germany. [Downloadable!]
  2. Tomoki Fujii, 2007. "Geographic Decomposition of Inequality in Health and Wealth: Evidence from Cambodia," Working Papers 24-2007, Singapore Management University, School of Economics. [Downloadable!]
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