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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 paper 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 modelling of the impacts of specific trade reforms. Case studies are presented for China and Morocco. Both the macro and micro approaches cast doubt on some widely heard 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. A number of covariates of the individual gains are identified. The results point to the importance of combining trade reforms with well-designed social protection policies. [Research Paper No. 2005/29]

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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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