IDEAS home Printed from
   My bibliography  Save this article

Can Trade Help Poor People? The Role of Trade, Trade Policy and Market Access in Tanzania


  • Burcu Duygan
  • Jesse B. Bump


Many development economists prescribe trade as a poverty-reducing formula. But how is this elixir supposed to work? This article contributes to the lively debate on this topic with household evidence from Tanzania - a poor country even within sub-Saharan Africa, the poorest region. About 81% of the poor work in agriculture, which accounts for 88% of the export bundle. The article describes existing poverty and then evaluates the poverty-reduction potential of trade, trade policy and market access. The article extends the analysis by simulating tariff changes and four switching scenarios that swap some poor households into trade-related sectors, such as cash cropping or tourism, to project national poverty reductions of up to 5.6% and household income increases of up to 21.5%. Copyright 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Burcu Duygan & Jesse B. Bump, 2007. "Can Trade Help Poor People? The Role of Trade, Trade Policy and Market Access in Tanzania," Development Policy Review, Overseas Development Institute, vol. 25(3), pages 293-310, May.
  • Handle: RePEc:bla:devpol:v:25:y:2007:i:3:p:293-310

    Download full text from publisher

    File URL:
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Aitken, Brian & Harrison, Ann & Lipsey, Robert E., 1996. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," Journal of International Economics, Elsevier, vol. 40(3-4), pages 345-371, May.
    2. Spatz, Julius & Steiner, Susan, 2002. "Post-Reform Trends in Wage Inequality: The Case of Urban Bolivia," Documentos de trabajo 9/2002, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    3. Peter Nunnenkamp, 2004. "To What Extent Can Foreign Direct Investment Help Achieve International Development Goals?," The World Economy, Wiley Blackwell, vol. 27(5), pages 657-677, May.
    4. Richard Baldwin, 1989. "The Growth Effects of 1992," NBER Working Papers 3119, National Bureau of Economic Research, Inc.
    5. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
    6. Rodrik, Dani, 2005. "Growth Strategies," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 14, pages 967-1014 Elsevier.
    7. Pan-Long Tsai, 1995. "Foreign direct investment and income inequality: Further evidence," World Development, Elsevier, vol. 23(3), pages 469-483, March.
    8. Giovanni S.F. Bruno & Rosario Crinò & Anna M. Falzoni, 2004. "Foreign Direct Investment, Wage Inequality, and Skilled Labor Demand in EU Accession Countries," KITeS Working Papers 154, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Feb 2004.
    9. Manuel Agosin & Roberto Machado, 2005. "Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment?," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 149-162.
    10. Edward M. Graham, 2000. "Fighting the Wrong Enemy: Antiglobal Activists and Multinational Enterprises," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 91.
    11. Theodore H. Moran & Edward M. Graham & Magnus Blomstrom, 2005. "Does Foreign Direct Investment Promote Development?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3810.
    12. Easterly, William-R, 2004. "Globalization, Inequality, and Development: The Big Picture," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(S1), pages 57-87, December.
    13. Rainer Thiele & Daniel Piazolo, 2003. "A Social Accounting Matrix for Bolivia Featuring Formal and Informal Activities," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(120), pages 285-318.
    14. Lay, Jann & Thiele, Rainer & Wiebelt, Manfred, 2004. "Pro-poor growth in Bolivia: accounting for external shocks and policy reforms," Kiel Working Papers 1231, Kiel Institute for the World Economy (IfW).
    15. Zhao, Yaohui, 2001. "Foreign direct investment and relative wages: The case of China," China Economic Review, Elsevier, vol. 12(1), pages 40-57.
    16. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    17. Kevin Sylwester, 2005. "Foreign direct investment, growth and income inequality in less developed countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 289-300.
    18. Willem te Velde , Dirk, 2003. "Foreign Direct Investment and Income Inequality in Latin America," Documentos de trabajo 4/2003, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    19. Stephan Klasen & Melanie Grosse & Rainer Thiele & Jann Lay & Julius Spatz & Manfred Wiebelt, 2004. "Operationalizing Pro-Poor Growth - Country Case Study: Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 101, Ibero-America Institute for Economic Research.
    20. Jemio, Luis Carlos & Wiebelt, Manfred, 2003. "¿Existe Espacio para Políticas Anti-Shocks en Bolivia? Lecciones de un Análisis basado en un Modelo de Equilibrio General Computable," Documentos de trabajo 1/2003, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    21. Jann Lay & Rainer Thiele & Manfred Wiebelt, 2008. "Shocks, Policy Reforms and Pro-Poor Growth in Bolivia: A Simulation Analysis," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 37-56, February.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    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:bla:devpol:v:25:y:2007:i:3:p:293-310. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.