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

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  • Bussolo, Maurizio
  • Lay, Jann
  • van der Mensbrugghe, Dominique

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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Bibliographic Info

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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References

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  1. 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).
  2. Robilliard, Anne-Sophie & Robinson, Sherman, 1999. "Reconciling household surveys and national accounts data using a cross entropy estimation method:," TMD discussion papers 50, International Food Policy Research Institute (IFPRI).
  3. 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.
  4. 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.
  5. Martin, Will & Mitra, Devashish, 1999. "Productivity growth and convergence in agriculture and manufacturing," Policy Research Working Paper Series 2171, The World Bank.
  6. 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.
  7. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
  8. 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.
  9. 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.
  10. Bourguignon, François & Robilliard, Anne-Sophie & Robinson, Sherman, 2008. "Examining the Social Impact of the Indonesian Financial Crisis Using a Macro-Micro Model," Open Access publications from Université Paris-Dauphine urn:hdl:123456789/5130, Université Paris-Dauphine.
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  12. Christopher B. Barrett, 2005. "Rural poverty dynamics: development policy implications," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 45-60, 01.
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Citations

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Cited by:
  1. Nadia Belhaj Hassine & Véronique Robichaud & Bernard Decaluwe, 2010. "Agricultural Trade, Liberalization, Productivity Gain, and Poverty Alleviation: a General Equilibrium Analysis," Working Papers MPIA 2010-09, PEP-MPIA.
  2. Bussolo, Maurizio & De Hoyos, Rafael E. & Medvedev, Denis, 2008. "Is the developing world catching up ? global convergence and national rising dispersion," Policy Research Working Paper Series 4733, The World Bank.
  3. Nicolas Hérault, 2009. "Sequential Linking of Computable General Equilibrium and Microsimulation Models," Melbourne Institute Working Paper Series wp2009n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  4. McDonald, Scott & Jansen, Marion & Von Uexkull, Erik, 2012. "The impact of crisis-related changes in trade flows on employment, incomes, regional and sectoral development in Brazil," ILO Working Papers 468902, International Labour Organization.
  5. Bussolo, Maurizio & De Hoyos, Rafael & Medvedev, Denis, 2009. "Global income distribution and poverty in the absence of agricultural distortions," Policy Research Working Paper Series 4849, The World Bank.
  6. Jann Lay, 2010. "Sequential macro-micro modelling with behavioural microsimulations," International Journal of Microsimulation, Interational Microsimulation Association, vol. 3(1), pages 24-34.
  7. Anonymous, 2009. "Journal of International Agricultural Trade and Development, Volume 5, Issue 1," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 5(1).
  8. Rafael E. de Hoyos & Denis Medvedev, 2011. "Poverty Effects of Higher Food Prices: A Global Perspective," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 387-402, 08.
  9. Bussolo, Maurizio & De Hoyos, Rafael E. & Medvedev, Denis & van der Mensbrugghe, Dominique, 2008. "Global Growth and Distribution: Are China and India Reshaping the World?," Working Papers RP2008/29, World Institute for Development Economic Research (UNU-WIDER).
  10. Nicolas Hérault, 2010. "Sequential linking of Computable General Equilibrium and microsimulation models: a comparison of behavioural and reweighting techniques," International Journal of Microsimulation, Interational Microsimulation Association, vol. 3(1), pages 35-42.
  11. 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.

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