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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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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2005/rp2005-29.pdf
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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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  1. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
  2. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
  3. Jeffrey Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," CASE Network Studies and Analyses 0035, CASE-Center for Social and Economic Research.
  4. Harrison, Ann, 1991. "Openness and growth : a time series, cross-country analysis for developing countries," Policy Research Working Paper Series 809, The World Bank.
  5. Chen, Shaohua & Ravallion, Martin, 2004. "How Have the World's Poorest Fared Since the Early 1980s?," Policy Research Working Paper Series 3341, The World Bank.
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  8. Hertel, Thomas W. & Reimer, Jeffrey J., 2004. "Predicting the poverty impacts of trade reform," Policy Research Working Paper Series 3444, The World Bank.
  9. Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (Bace) Approach," OECD Economics Department Working Papers 266, OECD Publishing.
  10. Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
  11. Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
  12. François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," DELTA Working Papers 2003-05, DELTA (Ecole normale supérieure).
  13. Dwayne Benjamin & Loren Brandt & John Giles, 2003. "The Evolution of Income Inequality in Rural China," Working Papers benjamin-04-01, University of Toronto, Department of Economics.
  14. Branko Milanovic, 2005. "Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys," World Bank Economic Review, World Bank Group, vol. 19(1), pages 21-44.
  15. Ravallion, Martin & Shaohua Chen, 2004. "China's (uneven) progress against poverty," Policy Research Working Paper Series 3408, The World Bank.
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  18. Easterly, William & Fischer, Stanley, 2001. "Inflation and the Poor," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 160-78, May.
  19. Dollar, David & Kraay, Aart, 2001. "Trade, growth, and poverty," Policy Research Working Paper Series 2615, The World Bank.
  20. John Cockburn, 2004. "Trade Liberalisation and Poverty in Nepal A Computable General Equilibrium Micro Simulation Analysis," Development and Comp Systems 0409012, EconWPA.
  21. Bourguignon, F. & Morrisson, C., 1989. "Income Distribution, Development and Foreign Trade: A Cross-Sectional Analysis," DELTA Working Papers 89-05, DELTA (Ecole normale supérieure).
  22. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  23. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  24. Elena Ianchovichina & Will Martin, 2004. "Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 3-27.
  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. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
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