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Structural change and poverty reduction in Brazil : the impact of the Doha Round

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Author Info
Bussolo, Maurizio
Lay, Jann
van der Mensbrugghe, Dominique

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Abstract

Over the medium time horizon, skill upgrading, differentials in sectoral technological progress, and migration of labor out of farming activities are some of the major structural adjustment factors shaping the evolution of an economy and its connected poverty trends. The main focus of the authors is understanding, for the case of Brazil, how a trade shock interacts with these structural forces and ascertaining whether it enhances or hinders medium-term poverty reduction. In particular, they consider the interactions between the migration of labor out of agriculture, a potentially important poverty reduction factor, and trade liberalization, which increases the price incentives to stay in agriculture. A recursive-dynamic computable general equilibrium model simulates Doha scenarios and compares them against a business as usual scenario. The authors estimate the poverty effects using a microsimulation model that primarily takes into account individuals'labor supply decisions. Their analysis shows that trade liberalization does contribute to structural poverty reduction. But unless increased productivity and stronger growth rates are attributed to trade reform, its contribution to medium-term poverty reduction is rather small.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3833.

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Date of creation: 01 Feb 2006
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Handle: RePEc:wbk:wbrwps:3833

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Keywords: Economic Theory&Research; Labor Markets; Rural Poverty Reduction; Achieving Shared Growth; Rural Development Knowledge&Information Systems;

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  1. Verner, Dorte, 2004. "Making the poor count takes more than counting the poor : A quick poverty assessment of the state of Bahia, Brazil," Policy Research Working Paper Series 3216, The World Bank. [Downloadable!]
  2. Ferreira, Francisco H. G. & Lanjouw, Peter & Neri, Marcelo Cortes, 2002. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Economics Working Papers (Ensaios Economicos da EPGE) 444, Graduate School of Economics, Getulio Vargas Foundation (Brazil). [Downloadable!]
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  3. François Bourguignon, 2002. "The growth elasticity of poverty reduction : explaining heterogeneity across countries and time periods," DELTA Working Papers 2002-03, DELTA (Ecole normale supérieure). [Downloadable!]
  4. Christopher B. Barrett, 2005. "Rural poverty dynamics: development policy implications," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 45-60, 01. [Downloadable!] (restricted)
  5. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
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  6. 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)
  7. François Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2002. "Ex-ante Evaluation of Conditional Cash Transfer Programs: The Case of Bolsa Escola," William Davidson Institute Working Papers Series 516, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  8. Martin, Will & Mitra, Devashish, 1999. "Productivity growth and convergence in agriculture and manufacturing," Policy Research Working Paper Series 2171, The World Bank. [Downloadable!]
  9. Kappel, Robert & Lay, Jann & Steiner, Susan, 2005. "Uganda : no more pro-poor growth?," Proceedings of the German Development Economics Conference, Kiel 2005 31, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  10. Anne-Sophie Robilliard & Sherman Robinson, 2003. "Reconciling Household Surveys and National Accounts Data Using a Cross Entropy Estimation Method," Review of Income and Wealth, Blackwell Publishing, vol. 49(3), pages 395-406, 09. [Downloadable!] (restricted)
  11. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January. [Downloadable!] (restricted)
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  12. Ravallion, Martin & Datt, Gaurav, 1999. "When is growth pro-poor? Evidence from the diverse experiences of India's states," Policy Research Working Paper Series 2263, The World Bank. [Downloadable!]
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