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Making unilateral trade liberalisation beneficial to the poor

  • Acharya, Sanjaya

In this paper, we investigate the impacts of unilateral import liberalisation by a representative South Asian developing economy, Nepal, and demonstrate those conditions required to make the impacts 'pro-poor.' Applying the Computable General Equilibrium model to Social Accounting Matrix data, we conclude that import liberalisation is growth-enhancing but that, unfortunately, the rich benefit more than do the poor. We envisage a restructured but plausible model economy that requires a transformational period of ten years, and simulate unilateral trade liberalisation but, in the context of a dynamic model. We conclude that improvement in efficiency parameters, reorganisation of investment patterns, along with reallocation of factors of production by both household group and activity type are required to make growth accrued by import liberalisation 'pro-poor' in developing economies such as that of Nepal.

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Article provided by Elsevier in its journal Socio-Economic Planning Sciences.

Volume (Year): 45 (2011)
Issue (Month): 2 (June)
Pages: 60-71

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Handle: RePEc:eee:soceps:v:45:y:2011:i:2:p:60-71
Contact details of provider: Web page: http://www.elsevier.com/locate/seps

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  17. Carlos E. J. M. Zarazaga, 2000. "Measuring the benefits of unilateral trade liberalization; part 2: dynamic models," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q1, pages 29-39.
  18. Acharya, Sanjaya & Cohen, Solomon, 2008. "Trade liberalisation and household welfare in Nepal," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1057-1060.
  19. Mauricio Mesquita Moreira, 2004. "Brazil’s Trade Liberalization and Growth: Has it Failed?," International Trade 0412008, EconWPA.
  20. Thurlow, James, 2006. "Has trade liberalization in South Africa affected men and women differently?:," DSGD discussion papers 36, International Food Policy Research Institute (IFPRI).
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