IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa05p700.html
   My bibliography  Save this paper

Trade Liberalization and Regional Inequality - Do Transportation Costs Impose a Spatial Poverty Trap?

Author

Listed:
  • Eduardo Haddad
  • Fernando Perobelli

Abstract

This paper focuses on the spatial impacts of barriers to trade, in the form of tariffs, in a national economy. More specifically, we are concerned with the spatial impediments for the internal transmission of the potential benefits of trade liberalization, in the form of high transportation costs that the more remote regions face. The strategy adopted in this research utilizes a spatial CGE model integrated to a geo-coded transportation model to evaluate shifts in the economic center of gravity and regional specialization in the Brazilian economy due to further liberal tariff policies. Comparative advantage is grasped through the use of differential regional production technologies; geographical advantage is verified through the explicit modeling of the transportation services, as well as increasing returns associated to agglomeration economies; and cumulative causation appears through the operation of internal and external multipliers and interregional spillover effects.

Suggested Citation

  • Eduardo Haddad & Fernando Perobelli, 2005. "Trade Liberalization and Regional Inequality - Do Transportation Costs Impose a Spatial Poverty Trap?," ERSA conference papers ersa05p700, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa05p700
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa05/papers/700.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. McCann, Philip, 2001. "Urban and Regional Economics," OUP Catalogue, Oxford University Press, number 9780198776451.
    2. AGENOR Pierre-Richard & FERNANDES Reynaldo & HADDAD Eduardo & VAN DER MENSBRUGGHE Dominique, 2010. "Analyzing the Impact of Adjustment Policies on the Poor: An IMMPA Framework for Brazil," EcoMod2003 330700002, EcoMod.
    3. Dixon, Peter B. & Parmenter, B.R., 1996. "Computable general equilibrium modelling for policy analysis and forecasting," Handbook of Computational Economics, in: H. M. Amman & D. A. Kendrick & J. Rust (ed.), Handbook of Computational Economics, edition 1, volume 1, chapter 1, pages 3-85, Elsevier.
    4. Haddad, Eduardo A. & Domingues, Edson P. & Perobelli, Fernando S., 2002. "Regional effects of economic integration: the case of Brazil," Journal of Policy Modeling, Elsevier, vol. 24(5), pages 453-482, August.
    5. repec:idb:brikps:8650 is not listed on IDEAS
    6. Harrison, Glenn W. & Rutherford, Thomas F. & Tarr, David G. & Gurgel, Angelo, 2002. "Regional, Multilateral and Unilateral Trade Policies of MERCOSUR for Growth and Poverty Reduction in Brazil," Conference papers 331003, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Guilhoto, Joaquim José Martins & Hasegawa, Marcos & Lopes, Ricardo Luis, 2002. "A estrutura teórica do modelo inter-regional para a economia brasileira - MIBRA [The theoretical structure of inter regional model for the Brazilian economy - MIBRA]," MPRA Paper 54019, University Library of Munich, Germany.
    8. Venables, Anthony J, 1998. "The Assessment: Trade and Location," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 14(2), pages 1-6, Summer.
    9. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    10. Jacek Cukrowski & Manfred M. Fischer, 2000. "Theory of Comparative Advantage: Do Transportation Costs Matter?," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 311-322, May.
    11. Kashif S. Mansori, 2003. "The Geographic Effects of Trade Liberalization with Increasing Returns in Transportation," Journal of Regional Science, Wiley Blackwell, vol. 43(2), pages 249-268, May.
    12. Burniaux, Jean-March & Truong, Truong P., 2002. "Gtap-E: An Energy-Environmental Version Of The Gtap Model," Technical Papers 28705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    14. Baer, Werner & Maloney, William, 1997. "Neoliberalism and income distribution in Latin America," World Development, Elsevier, vol. 25(3), pages 311-327, March.
    15. Barker, Terry, 1998. "The effects on competitiveness of coordinated versus unilateral fiscal policies reducing GHG emissions in the EU: an assessment of a 10% reduction by 2010 using the E3ME model," Energy Policy, Elsevier, vol. 26(14), pages 1083-1098, December.
    16. Filho, Leonardo Campos, 1998. "Unilateral Liberalisation and Mercosul: Implications for Resource Allocation," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 52(4), October.
    17. Domingues, Edson P. & Haddad, Eduardo A. & Hewings, Geoffrey, 2008. "Sensitivity analysis in applied general equilibrium models: An empirical assessment for MERCOSUR free trade areas agreements," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 287-306, May.
    18. Bröcker, Johannes, 1998. "Spatial effects of transport infrastructure: The role of market structure," Discussion Papers 5/98, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    19. Frankel, Jeffrey A. (ed.), 1997. "The Regionalization of the World Economy," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226259956, December.
    20. Matthew W. Peter & Mark Horridge & G.A.Meagher & Fazana Naqvi & B.R.Parmenter, 1996. "The Theoretical Structure of MONASH-MRF," Centre of Policy Studies/IMPACT Centre Working Papers op-85, Victoria University, Centre of Policy Studies/IMPACT Centre.
    21. Flores, Renato Jr., 1997. "The gains from MERCOSUL: A general equilibrium, imperfect competition evaluation," Journal of Policy Modeling, Elsevier, vol. 19(1), pages 1-18, February.
    22. Bilgic, Abdulbaki & King, Stephen A. & Lusby, Aaron K. & Schreiner, Dean F., 2002. "Estimates of U.S. Regional Commodity Trade Elasticities of Substitution," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 32(2), pages 1-20.
    23. Hans M. Amman & David A. Kendrick, . "Computational Economics," Online economics textbooks, SUNY-Oswego, Department of Economics, number comp1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rodriguez, U-Primo E., 2007. "State-of-the-Art in Regional Computable General Equilibrium Modelling with a Case Study of the Philippines," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 20(1).
    2. Plassmann, Florenz & Feltenstein, Andrew, 2016. "How large do multi-region models need to be?," Journal of Policy Modeling, Elsevier, vol. 38(1), pages 138-155.
    3. Ludena, Carlos E. & Schuschny, Andres & de Miguel, Carlos & Duran Lima, Jose E., 2009. "Georeferenced Assessment of Trade Liberalization Effects on Agriculture in Ecuador," 2009 Conference, August 16-22, 2009, Beijing, China 50556, International Association of Agricultural Economists.
    4. De Miguel, Carlos J. & Ludeña, Carlos & Schuschny, Andrés Ricardo & Durán Lima, José Elías, 2009. "Trade and sustainable development: spatial distribution of trade policies impacts on agriculture," Medio Ambiente y Desarrollo 5680, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. World Bank, 2008. "Brazil : Evaluating the Macroeconomic and Distributional Impacts of Lowering Transportation Costs," World Bank Publications - Reports 8083, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. HADDAD Eduardo & DOMINGUES Edson, 2010. "Interstate Trade and Regional Development: An Interregional CGE Approach," EcoMod2003 330700065, EcoMod.
    2. Honkatukia, Juha, 2005. "Emission trade and the electricity markets," Conference papers 331379, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Eduardo Amaral Haddad & Edson Paulo Domingues, 2003. "Interstate Trade and Regional Development: an (Integrated) Interregional CGE Approach," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31st Brazilian Economics Meeting] e32, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    4. World Bank, 2008. "Brazil : Evaluating the Macroeconomic and Distributional Impacts of Lowering Transportation Costs," World Bank Publications - Reports 8083, The World Bank Group.
    5. Eduardo Haddad & Geoffrey Hewings, 2004. "Transportation Costs, Increasing Returns and Regional Growth: An Interregional CGE Analysis," ERSA conference papers ersa04p461, European Regional Science Association.
    6. Esmedekh Lkhanaajav, 2016. "CoPS-style CGE modelling and analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-264, Victoria University, Centre of Policy Studies/IMPACT Centre.
    7. Edson Domingues & Eduardo Haddad & Fernando Perobelli, 2001. "Short-run Regional Effects of Alternative Strategies for Economic Integration: The Case of Brazil," ERSA conference papers ersa01p210, European Regional Science Association.
    8. Hasegawa, Marcos & Guilhoto, Joaquim José Martins, 2006. "Investimento e produtividade dos fatores primários: uma análise de equilíbrio geral aplicado [Investment and productivity of primary factors: a general applied general equilibrium analysis]," MPRA Paper 54555, University Library of Munich, Germany.
    9. Eduardo Haddad & Alexandre A. Porsse & Eduardo P. Ribeiro, 2006. "Modeling Interjurisdictional Tax Competition in a Federal System," ERSA conference papers ersa06p359, European Regional Science Association.
    10. Alexandre Porsse & Eduardo Haddad & Eduardo Ribeiro, 2005. "Economic Effects Of Regional Tax Incentives: A General Equilibrium Approach," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 124, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    11. Haddad, Eduardo A. & Domingues, Edson P. & Perobelli, Fernando S., 2002. "Regional effects of economic integration: the case of Brazil," Journal of Policy Modeling, Elsevier, vol. 24(5), pages 453-482, August.
    12. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
    13. Michael Kohlhaas & Katja Schumacher & Jochen Diekmann & Dieter Schumacher & Martin Cames, 2004. "Economic, Environmental and International Trade Effects of the EU Directive on Energy Tax Harmonization," Discussion Papers of DIW Berlin 462, DIW Berlin, German Institute for Economic Research.
    14. Alexandre Porsse & Eduardo Haddad, 2005. "Tax incentives and economic effects - a general equilibrium approach," ERSA conference papers ersa05p733, European Regional Science Association.
    15. Guilhoto, Joaquim José Martins & Hasegawa, Marcos & Lopes, Ricardo Luis, 2002. "A estrutura teórica do modelo inter-regional para a economia brasileira - MIBRA [The theoretical structure of inter regional model for the Brazilian economy - MIBRA]," MPRA Paper 54019, University Library of Munich, Germany.
    16. Eboli, Fabio & Parrado, Ramiro & Roson, Roberto, 2010. "Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model," Environment and Development Economics, Cambridge University Press, vol. 15(5), pages 515-533, October.
    17. Peter B. Dixon & Maureen T. Rimmer, 2005. "Explaining a dynamic CGE simulation with a trade-focused back-of-the-envelope analysis: the effects of eCommerce on Australia," Chapters, in: Sisira Jayasuriya (ed.), Trade Theory, Analytical Models and Development, chapter 10, Edward Elgar Publishing.
    18. Hertel, Thomas W. & Tyner, Wallace E. & Birur, Dileep K., 2008. "Biofuels for all? Understanding the Global Impacts of Multinational Mandates," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6526, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Alvaro Calzadilla & Katrin Rehdanz & Richard Betts & Pete Falloon & Andy Wiltshire & Richard Tol, 2013. "Climate change impacts on global agriculture," Climatic Change, Springer, vol. 120(1), pages 357-374, September.
    20. Britz, Wolfgang & Li, Jingwen & Shang, Linmei, 2021. "Combining large-scale sensitivity analysis in Computable General Equilibrium models with Machine Learning: An Example Application to policy supporting the bio-economy," Conference papers 333285, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    More about this item

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa05p700. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.