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Gainers and losers from trade reform in Morocco

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Author Info
Ravallion, Martin
Lokshin, Michael

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Abstract

The authors use Morocco's national survey of living standards to measure the short-term welfare impacts of prior estimates of the price changes attributed to various trade policy reforms for cereals-the country's main food staple. They find small impacts on mean consumption and inequality in the aggregate. There are both gainers and losers and (contrary to past claims) the rural poor are worse off on average after trade policy reforms. The authors decompose the aggregate impact on inequality into a"vertical"component (between people at different pre-reform welfare levels) and a"horizontal"component (between people at the same pre-reform welfare level). There is a large horizontal component which dominates the vertical impact of full de-protection. The diverse impacts reflect a degree of observable heterogeneity in consumption behavior and income sources, with implications for social protection policies.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3368.

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Date of creation: 01 Aug 2004
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Handle: RePEc:wbk:wbrwps:3368

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Keywords: Economic Theory&Research; Labor Policies; Poverty Monitoring&Analysis; Environmental Economics&Policies; Consumption; Inequality; Environmental Economics&Policies; Economic Theory&Research; Poverty Assessment; Poverty Lines;

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  1. Thomas Hertel & Jeffrey Reimer, 2005. "Predicting the poverty impacts of trade reform," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 14(4), pages 377-405, December. [Downloadable!] (restricted)
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  2. Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier. [Downloadable!] (restricted)
  3. Alan J. Auerbach & Kevin A. Hassett, 1999. "A New Measure of Horizontal Equity," NBER Working Papers 7035, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
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  5. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July. [Downloadable!] (restricted)
  6. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July. [Downloadable!] (restricted)
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  1. Sandra Polaski et al, 2008. "Policy dilemmas in India: The Impact of changes in agricultural prices on rural and urban poverty," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-012, Indira Gandhi Institute of Development Research, Mumbai, India. [Downloadable!]
  2. 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. [Downloadable!]
  3. Essama-Nssah, B., 2005. "Simulating the poverty impact of macroeconomic shocks and policies," Policy Research Working Paper Series 3788, The World Bank. [Downloadable!]
  4. Baliamoune-Lutz, Mina, 2009. "Tunisia's Development Experience: A Success Story?," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  5. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "Poverty effects of Russia's WTO accession : modeling"real"households and endogenous productivity effects," Policy Research Working Paper Series 3473, The World Bank. [Downloadable!]
  6. Ferreira, Francisco H.G. & Leite, Phillippe G. & Wai-Poi, Matthew, 2007. "Trade Liberalization, Employment Flows and Wage Inequality in Brazil," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  7. Thomas W. Hertel, 2006. "A Survey of Findings on the Poverty Impacts of Agricultural Trade Liberalization," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 3(1), pages 1-26. [Downloadable!]
  8. Bardhan, Pranab, 2005. "Globalization and Rural Poverty," Working Papers RP2005/30, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  9. Wagstaff, Adam, 2005. "Decomposing changes in income inequality into vertical and horizontal redistribution and reranking, with applications to China and Vietnam," Policy Research Working Paper Series 3559, The World Bank. [Downloadable!]
  10. Klytchnikova, Irina & Diop, Ndiame, 2006. "Trade reforms, farm productivity, and poverty in Bangladesh," Policy Research Working Paper Series 3980, The World Bank. [Downloadable!]
  11. Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank. [Downloadable!]
  12. Sahlén, Linda, 2008. "The Impacts of Food- and Oil Price Shocks on the Namibian Economy: the Role of Water Scarcity," UmeÃ¥ Economic Studies 758, Umeå University, Department of Economics. [Downloadable!]
  13. Sahlén, Linda, 2009. "Essays on Environmental and Development Economics - Public Policy, Resource Prices and Global Warming," UmeÃ¥ Economic Studies 762, Umeå University, Department of Economics. [Downloadable!]
  14. Wodon, Quentin & Zaman, Hassan, 2008. "Rising food prices in Sub-Saharan Africa : poverty impact and policy responses," Policy Research Working Paper Series 4738, The World Bank. [Downloadable!]
  15. Kavallari, A. & Schmitz, P.M., 2008. "Multilateral trade liberalisation and Preference erosion: Effects on the agricultural sector of the EU's Mediterranean Partner Countries," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44177, European Association of Agricultural Economists. [Downloadable!]
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