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Trade policy reform and poverty alleviation


Author Info

  • Hoekman, Bernard
  • Michalopoulos, Constantine
  • Schiff, Maurice
  • Tarr, David


In this paper, developed as part of the World Bank's Poverty Reduction Strategy Sourcebook, the authors examine how to implement trade liberalization as part of a strategy for alleviating poverty in developing countries. They discuss trade policy instruments, institutions, complementary policies, sector issues, adjustment policies, and safety nets in an integrated approach to trade policy as a tool for poverty alleviation. The authors examine the patterns or models of trade policy that have been successful in alleviating poverty. They discuss the role of tariffs, nontariff barriers, contingent protection (such as safeguards and antidumping), special import regimes (such as duty drawback), export taxes, export subsidies, and trade-related institutions (such as standards, marketing, export finance, customs clearance, and regional trade arrangements). The authors also discuss policies that complement successful trade reform, including macroeconomic stability, a competitive exchange rate, flexible labor markets, competitive product markets, and policies that do not discriminate against foreigners in investment. They suggest approaches to policies and institutions in services and agriculture, key sectors in poverty reduction. They explain the roles of retraining and safety nets in dealing with the adjustment costs of trade liberalization. Finally, the authors elaborate guidelines for implementing trade reform and explain tools for assessing whether trade reform will help or harm the poor in particular sectors in the short run.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2733.

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Date of creation: 31 Dec 2001
Date of revision:
Handle: RePEc:wbk:wbrwps:2733

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Keywords: Environmental Economics&Policies; Payment Systems&Infrastructure; Economic Theory&Research; Trade Policy; Labor Policies; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies; Economic Theory&Research; Trade Policy; Achieving Shared Growth;

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Cited by:
  1. Cadot, Olivier & de Melo, Jaime & Dutoit, Laure, 2006. "The Elimination of Madagascar's Vanilla Marketing Board, Ten Years On," CEPR Discussion Papers 5548, C.E.P.R. Discussion Papers.
  2. Sami Bibi & Rim Chatti, 2006. "Trade Liberalization and the Dynamics of Poverty in Tunisia: a Layered CGE Microsimulation Analysis/Libéralisation des échanges et dynamique de la pauvreté en Tunisie: Analyse avec une micro-simula," Working Papers MPIA 2006-07, PEP-MPIA.
  3. Tsai, Pan-Long & Huang, Chao-Hsi, 2007. "Openness, Growth and Poverty: The Case of Taiwan," World Development, Elsevier, vol. 35(11), pages 1858-1871, November.
  4. Anderson, Kym, 2004. "Agricultural trade reform and poverty reduction in developing countries," Policy Research Working Paper Series 3396, The World Bank.
  5. Barraud, Ariel & Calfat, Germán, 2006. "The Effects of Liberalizing the Yellow Maize Market in Guatemala: a Partial Equilibrium Multi-market Approach," IOB Working Papers 2006.03, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
  6. Oyewumi, Olubukola Ayodeju & Jooste, Andre & Britz, Wolfgang & van Schalkwyk, Herman D., 2008. "Trade Liberalization in the South African Livestock Industry: implications for rural development," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 51997, African Association of Agricultural Economists (AAAE).
  7. Ariel Barraud & German Calfat, 2008. "Poverty Effects from Trade Liberalisation in Argentina," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 365-383.
  8. Vergez, Antonin, 2007. "Agricultural Price Seasonality and Market Failure: Examining the Net Seller Household and the Net Benefit Ratio Definition," 106th Seminar, October 25-27, 2007, Montpellier, France 7911, European Association of Agricultural Economists.
  9. Oyewumi, Olubukola Ayodeju, 2005. "Modeling tariff rate quotas in the South African livestock industry," Master's Degree Theses 28064, University of the Free State, Department of Agricultural Economics.


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