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Gainers and losers from trade reform in Morocco

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Listed author(s):
  • Ravallion, Martin
  • Lokshin, Michael

Abstract

The authors use Morocco's national survey of living standards to measure the short-term welfare impacts of prior estimates of the price changes attributed to various trade policy reforms for cereals-the country's main food staple. They find small impacts on mean consumption and inequality in the aggregate. There are both gainers and losers and (contrary to past claims) the rural poor are worse off on average after trade policy reforms. The authors decompose the aggregate impact on inequality into a"vertical"component (between people at different pre-reform welfare levels) and a"horizontal"component (between people at the same pre-reform welfare level). There is a large horizontal component which dominates the vertical impact of full de-protection. The diverse impacts reflect a degree of observable heterogeneity in consumption behavior and income sources, with implications for social protection policies.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3368.

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Date of creation: 01 Aug 2004
Handle: RePEc:wbk:wbrwps:3368
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Keywords: Economic Theory&Research; Labor Policies; Poverty Monitoring&Analysis; Environmental Economics&Policies; Consumption; Inequality; Environmental Economics&Policies; Economic Theory&Research; Poverty Assessment; Poverty Lines;

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  1. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
  2. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
  3. Alan J. Auerbach & Kevin A. Hassett, 2002. "A New Measure of Horizontal Equity," American Economic Review, American Economic Association, vol. 92(4), pages 1116-1125, September.
  4. Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution,in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier.
  5. Abdelkhalek, T., 2000. "De l'impact de la liberalisation du marche cerealier marocain: renseignements a partir d'un modele de comportement des menages ruraux," Equipe MIMAP - Maroc d2, Institut National de statistique et d'economie appliquee (I.N.S.E.A.).
  6. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.
  7. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
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