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Gains from Trade: Implications for Labour Market Adjustment and Poverty Reduction in Africa

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  • Fosu, Augustin Kwasi
  • Mold, Andrew

Abstract

This paper reassesses the gains from trade for sub-Saharan Africa, and draws their implications for labour market adjustment and poverty reduction. It reviews previous studies on multilateral liberalization, focusing on the findings from computable general equilibrium (CGE) models with relevance to African economies. The implications of these findings for poverty reduction are discussed. Our own CGE exercise supports the hypothesis that African countries cannot expect substantial gains from further multilateral liberalization. Moreover, given the sharp contraction of import-competing sectors in response to trade liberalization in many African economies, coupled with insufficient compensation through labour market adjustments in other sectors, this study suggests that the ultimate impact on poverty reduction is likely to be small or even negative.

Suggested Citation

  • Fosu, Augustin Kwasi & Mold, Andrew, 2007. "Gains from Trade: Implications for Labour Market Adjustment and Poverty Reduction in Africa," WIDER Working Paper Series 065, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2007-65
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    Cited by:

    1. Hisako Kai & Shigeyuki Hamori, 2009. "Globalization, financial depth, and inequality in Sub-Saharan Africa," Economics Bulletin, AccessEcon, vol. 29(3), pages 2025-2037.
    2. repec:oup:erevae:v:44:y:2017:i:4:p:592-633. is not listed on IDEAS
    3. Potelwa, Xolisiwe Y. & Nyhodo, Bonani & Ntombela, Sifiso M., 2016. "Evaluating South Africa’s export performance drivers: Are we exporting to our political or economic friends?," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249318, African Association of Agricultural Economists (AAAE).
    4. Miet Maertens & Liesbeth Colen & Johan F. M. Swinnen, 2011. "Globalisation and poverty in Senegal: a worst case scenario?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(1), pages 31-54, March.
    5. John Anyanwu, 2013. "Working Paper 181 - Determining the Correlates of Poverty for Inclusive Growth in Africa," Working Paper Series 979, African Development Bank.
    6. Pamela Coke Hamilton & Yvonne Tsikata & Emmanuel Pinto Moreira, 2009. "Accelerating Trade and Integration in the Caribbean : Policy Options for Sustained Growth, Job Creation, and Poverty Reduction," World Bank Publications, The World Bank, number 2652.

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    Keywords

    trade; openness; liberalization; poverty reduction;

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