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A Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe


  • Margaret Chitiga

    () (Department of Economics, University of Pretoria)

  • Ramos Mabugu

    () (Centre for Environmental Economics and Policy in Africa, Department of Agricultural Economics, University of Pretoria)

  • Tonia Kandiero

    () (National Treasury)


The paper uses a micro-simulation computable general equilibrium (CGE) model to study the impact on poverty of a complete removal of tariffs in Zimbabwe. The model incorporates 14006 households derived from the 1995 Poverty Assessment Study Survey. This paper’s novelty is that it is one among a small group of papers that incorporates individual households in the CGE model as opposed to having representative households. Using individual households allows for a comprehensive analysis of poverty. The complete removal of tariffs favours exporting sectors. Poverty falls in the economy while inequality hardly changes. The results differ between rural and urban areas.

Suggested Citation

  • Margaret Chitiga & Ramos Mabugu & Tonia Kandiero, 2007. "A Computable General Equilibrium Micro-Simulation Analysis of the Impact of Trade Policies on Poverty in Zimbabwe," Working Papers 200715, University of Pretoria, Department of Economics.
  • Handle: RePEc:pre:wpaper:200715

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    References listed on IDEAS

    1. John Cockburn, 2002. "Trade Liberalisation and Poverty in Nepal: A Computable General Equilibrium Micro Simulation Analysis," CSAE Working Paper Series 2002-11, Centre for the Study of African Economies, University of Oxford.
    2. Luc Savard, 2005. "Poverty and Inequality Analysis within a CGE Framework: A Comparative Analysis of the Representative Agent and Microsimulation Approaches," Development Policy Review, Overseas Development Institute, vol. 23(3), pages 313-331, May.
    3. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
    4. Rattso, Jorn & Torvik, Ragnar, 1998. "Zimbabwean Trade Liberalisation: Ex Post Evaluation," Cambridge Journal of Economics, Oxford University Press, vol. 22(3), pages 325-346, May.
    5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    6. Decaluwé, Bernard & Dumont, Jean-Christophe & Savard, Luc, 2000. "Measuring Poverty and Inequality in a Computable General Equilibrium Model," Cahiers de recherche 9926, Université Laval - Département d'économique.
    7. Cogneau, Denis & Robilliard, Anne-Sophie, 2000. "Growth, distribution and poverty in Madagascar," TMD discussion papers 61, International Food Policy Research Institute (IFPRI).
    8. Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," WIDER Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    9. Davies, Rob & Rattso, Jorn & Torvik, Ragnar, 1994. "The Macroeconomics of Zimbabwe in the 1980s: A CGE-Model Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 3(2), pages 153-198, October.
    10. Stifel, David C. & Thorbecke, Erik, 2003. "A dual-dual CGE model of an archetype African economy: trade reform, migration and poverty," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 207-235, April.
    11. Reimer, Jeffrey J., 2002. "Estimating the Poverty Impacts of Trade Liberalization," GTAP Working Papers 1163, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    12. Ramkishen Rajan & Graham Bird, 2002. "Trade Liberalization and Poverty: Where Do We Stand?," Centre for International Economic Studies Working Papers 2002-30, University of Adelaide, Centre for International Economic Studies.
    13. Winters, L. Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers 2382, C.E.P.R. Discussion Papers.
    14. Bautista, Romeo M. & Lofgren, Hans & Thomas, Marcelle, 1998. "Does trade liberalization enhance income growth and equity in Zimbabwe?: the role of complimentary policies," TMD discussion papers 32, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Acharya, Sanjaya & Cohen, Solomon, 2008. "Trade liberalisation and household welfare in Nepal," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1057-1060.
    2. Mahofa, Godfrey, 2007. "Economic Analysis of Factors Affecting Cotton Production In Zimbabwe," Research Theses 134490, Collaborative Masters Program in Agricultural and Applied Economics.
    3. Kebede, Sindu & Fekadu, Belay & Aredo, Dejene, 2011. "Trade Liberalization and Poverty: A Macro-Micro Analysis in Ethiopia," Proceedings of the German Development Economics Conference, Berlin 2011 44, Verein für Socialpolitik, Research Committee Development Economics.
    4. Rana Hendy & Chahir Zaki, 2013. "Assessing the Effects of Trade Liberalization on Wage Inequalities in Egypt: A Microsimulation Analysis," The International Trade Journal, Taylor & Francis Journals, vol. 27(1), pages 63-104, March.
    5. Ayoki, Milton, 2013. "Computable General Equilibrium Micro Simulation Analysis of the Impact of Trade Policies on Poverty in Uganda," MPRA Paper 78876, University Library of Munich, Germany.
    6. Ramos Mabugu & Margaret Chitiga, 2009. "Liberalising Trade In South Africa: A Survey Of Computable General Equilibrium Studies," South African Journal of Economics, Economic Society of South Africa, vol. 77(3), pages 445-464, September.
    7. Chala, Zelalem T. & Norton, George W. & Grant, Jason H., 2010. "Economic Significance of Specific Export Promotion on Poverty Reduction and Inter- Industry Growth of Ethiopia," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61739, Agricultural and Applied Economics Association.
    8. Acharya, Sanjaya, 2011. "Making unilateral trade liberalisation beneficial to the poor," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 60-71, June.
    9. Ayoki, Milton, 2013. "Trade Policies and Poverty in Uganda: A Computable General Equilibrium Micro Simulation Analysis," MPRA Paper 80327, University Library of Munich, Germany.
    10. Ziaur Rahman, 2014. "The impact of trade liberalization on poverty reduction in Bangladesh: A computable general equilibrium (CGE) analysis," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(4), pages 240-253, April.

    More about this item


    Computable General Equilibrium; Trade Liberalisation; Micro-simulation; Poverty; Inequality;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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