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Looking Beyond Averages in the Trade and Poverty Debate

  • Ravallion, Martin

There has been much debate about how much poor people in developing countries gain from trade openness, as one aspect of"globalization."The author views the issue through both"macro"and"micro"empirical lenses. The macro lens uses cross-country comparisons and aggregate time series data. The micro lens uses household-level data combined with structural modeling of the impacts of specific tradereforms. The author presents case studies for China and Morocco. Both the macro and micro approaches cast doubt on some wide generalizations from both sides of the globalization debate. Additionally the micro lens indicates considerable heterogeneity in the welfare impacts of trade openness, with both gainers and losers among the poor. The author identifies a number of covariates of the individual gains. The results point to the importance of combining trade reforms with well-designed social protection policies.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2005/29.

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Length: 30 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:unu:wpaper:rp2005-29
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  10. 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.
  11. Ianchovichina, Elena & Martin, William, 2003. "Economic impacts of China's accession to the World Trade Organization," Policy Research Working Paper Series 3053, The World Bank.
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  19. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  20. Datt, Gaurav & Ravallion, Martin, 1998. "Farm productivity and rural poverty in India," FCND discussion papers 42, International Food Policy Research Institute (IFPRI).
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  22. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: a Skeptic's Guide to the Cross-National Evidence," Working Papers 9912, Economic Research Forum, revised Apr 1999.
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  25. Dollar, David, 1992. "Outward-Oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-1985," Economic Development and Cultural Change, University of Chicago Press, vol. 40(3), pages 523-44, April.
  26. Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
  27. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
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