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Trade Liberalisation and Poverty: What have we learned in a decade?

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  • Martuscelli, Antonio
  • Winters, L. Alan

Abstract

This paper reviews key recent literature on the effects of trade liberalisation on poverty in developing countries and asks whether our knowledge has changed significantly over a decade. The conclusion that liberalisation generally boosts income and thus reduces poverty has not changed; some suggest that this is not true for very poor countries, but this is not an established finding. On microeconomics, recent literature again confirms that liberalisation has very heterogeneous effects on poor households, depending, inter alia, on what trade policies are liberalised and how the household earns its living. Working in the export predicts gains and in the import-competing sector losses, a finding that is re-inforced by studies of the effects of liberalisation on wages. New research has suggested several ways in which intra-sectoral wage inequality is increased by trade, but this does not generally indicate that the poor actually lose. A fairly common finding is that female workers gain from trade liberalisation.

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  • Martuscelli, Antonio & Winters, L. Alan, 2014. "Trade Liberalisation and Poverty: What have we learned in a decade?," CEPR Discussion Papers 9947, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9947
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    18. Victoria Pistikou, 2020. "The Impact of CEFTA on Exports, Economic Growth and Development," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 13(3), pages 15-31, December.
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    22. Mr. Daouda Sembene, 2015. "Poverty, Growth, and Inequality in Sub-Saharan Africa: Did the Walk Match the Talk under the PRSP Approach?," IMF Working Papers 2015/122, International Monetary Fund.
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    More about this item

    Keywords

    developing countries; growth; poverty; tariffs; trade liberalisation;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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