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Globalisation and Poverty in Latin America: Some Channels and Some Evidence


  • Guido G. Porto


This paper provides an overview of the main mechanisms through which globalisation can affect poverty and household welfare in Latin America and presents supporting evidence from different case studies in the region. One case study explores the impacts of agricultural trade liberalisation in world markets on poverty in Argentina, with an emphasis on labour income effects via real wages. The second case study examines the impacts of CAFTA on net producers and net consumers among the indigenous population in Guatemala. The analysis explores short-run impacts as well as medium-run impacts as households adjust farm decisions. Finally, a last exercise is set up to study the role of agricultural liberalisation on wages, employment and unemployment when there are frictions in labour markets. These case studies show that the impacts of trade on developing countries are heterogeneous. In Argentina, there are gains from liberalisation of world agriculture and higher food prices. In Guatemala, instead, the indigenous population would benefit from lower food prices. It is clear that household adjustments and complementary factors are fundamental ingredients of any reasonable evaluation of the welfare impacts of trade reforms. Copyright 2007 The Author Journal compilation 2007 Blackwell Publishing Ltd .

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  • Guido G. Porto, 2007. "Globalisation and Poverty in Latin America: Some Channels and Some Evidence," The World Economy, Wiley Blackwell, vol. 30(9), pages 1430-1456, September.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:9:p:1430-1456

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    References listed on IDEAS

    1. Kym Anderson & Lee Ann Jackson, 2005. "Some Implications of GM Food Technology Policies for Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(3), pages 385-410, September.
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    6. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2007. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global CGE Analysis of Economic Impacts," Centre for International Economic Studies Working Papers 2007-07, University of Adelaide, Centre for International Economic Studies.
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    8. John Baffes, 2005. "The "Cotton Problem"," World Bank Research Observer, World Bank Group, vol. 20(1), pages 109-144.
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    Cited by:

    1. Nadia Belhaj Hassine & Veronique Robichaud & Bernard Decaluwé, 2010. "Agricultural Trade Liberalization, Productivity Gain and Poverty Alleviation: A General Equilibrium Analysis," Working Papers 519, Economic Research Forum, revised 05 Jan 2010.
    2. Emami Namini, Julian, 2014. "The short and long-run impact of globalization if firms differ in factor input ratios," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 37-64.
    3. Sámano, Claudia & Szekely, Miguel, 2012. "Did Trade Openness Affect Income Distribution in Latin America? Evidence for the Years 1980?2010," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
    4. Julian Emami Namini, 2009. "International Trade with Firm Heterogeneity in Factor Shares," Tinbergen Institute Discussion Papers 09-020/1, Tinbergen Institute.
    5. repec:unu:wpaper:wp2012-03 is not listed on IDEAS
    6. Nadia Belhaj Hassine & Veronique Robichaud & Bernard Decaluwé, 2010. "Does Agricultural Trade Liberalization Help The Poor in Tunisia? A Micro-Macro View in A Dynamic General Equilibrium Context," Working Papers 556, Economic Research Forum, revised 10 Jan 2010.
    7. Lederman, Daniel, 2011. "International trade and inclusive growth : a primer for busy policy analysts," Policy Research Working Paper Series 5886, The World Bank.
    8. Vukšić, Goran & Holzner, Mario, 2016. "Trade and fiscal imbalances in Southeastern Europe: Can fiscal devaluation help?," Economic Systems, Elsevier, vol. 40(4), pages 568-581.

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