TARIFF REDUCTION AND FUNCTIONAL INCOME DISTRIBUTION IN PAKISTAN: A CGE Analysis
This paper analyses impact of one of the major trade liberalisation policies of Structural Adjustment reforms, tariff rate reduction, on functional income distribution to households in Pakistan through CGE modelling, that is well known for this type of analysis. Using SAM-based CGE model, simulation exercises are undertaken to describe the impact of key adjustment policy i.e., reduction in tariff rate by 80% on industrial imports. Simulation results of CGE model simply show the direction of change in various variables as a result of tariff reduction. The main conclusions are as follows. The results show the impact on income of households through change in factor prices. It shows that real income of households’ has increased due to decline in prices. The percentage share of labour in GDP has increased while of capital has declined. The study by Siddiqui and Iqbal (1999) shows that higher percentage of income from capital goes to rich and higher percentage of wages and salaries goes to poor segment of population). This implies that the gap between the rich and poor has reduced. The study shows that consumption of all goods but education has increased and consumption of non-food items increases more as compared to food items. This implies that tariff reduction has welfare enhancing impact on households.Indeed the analysis with disaggregated households sector will give the relatively better picture. Due to decline in import prices, industrial imports have increased by 10% while all other imports have declined. All exports increase. But industrial exports increases more as compare to exports from all other sectors.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- repec:pid:journl:v:36:y:1997:i:1:p:39-68 is not listed on IDEAS
- De Melo, Jaime, 1988. "CGE models for the analysis of trade policy in developing countries," Policy Research Working Paper Series 3, The World Bank.
- repec:pid:mimaps:2001:10 is not listed on IDEAS
- Morrisson, Christian, 1991. "Adjustment, incomes and poverty in Morocco," World Development, Elsevier, vol. 19(11), pages 1633-1651, November.
- repec:pid:journl:v:35:y:1996:i:4:p:911-926 is not listed on IDEAS
- Iqbal, Z., 1996. "Three-gap analysis of structural adjustment in Pakistan," Other publications TiSEM aeeac5ac-5ac4-4069-a07e-2, Tilburg University, School of Economics and Management.
- de Janvry, Alain & Sadoulet, Elisabeth & Fargeix, Andre, 1991. "Politically feasible and equitable adjustment: Some alternatives for ecuador," World Development, Elsevier, vol. 19(11), pages 1577-1594, November.
- Robinson, Sherman, 1989. "Multisectoral models," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 18, pages 885-947 Elsevier.
- repec:pid:journl:v:37:y:1998:i:4:p:377-397 is not listed on IDEAS
- repec:pid:journl:v:33:y:1994:i:4:p:901-914 is not listed on IDEAS
- Thorbecke, Erik, 1991. "Adjustment, growth and income distribution in Indonesia," World Development, Elsevier, vol. 19(11), pages 1595-1614, November.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:6141. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.