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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

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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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2007/rp2007-12.pdf
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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 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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Cited by:
  1. Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex.
  2. Houssein Guimbard & Hugo Valin, 2008. "Vietnam's Accession to the WTO: Ex-Post Evaluation in a Dynamic Perspective," Working Papers 2008-31, CEPII research center.
  3. Tomoki Fujii, 2007. "Geographic Decomposition of Inequality in Health and Wealth: Evidence from Cambodia," Working Papers 24-2007, Singapore Management University, School of Economics.
  4. Arguello, Ricardo, 2009. "The Regional Impact of Discriminatory Trade Liberalization on Colombian Agriculture," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 39(2).
  5. 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.
  6. Nguyen, Cuong & Tran Ngoc, Truong & Van der Weide, Roy, 2009. "Rural Poverty and Inequality Maps in Vietnam: Estimation using Vietnam Household Living Standard Survey 2006 and Rural Agriculture and Fishery Census 2006," MPRA Paper 36378, University Library of Munich, Germany.

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