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The Doha Round, poverty, and regional inequality in Brazil

  • Filho, Joaquim Bento de Souza Ferreira
  • Horridge, Mark

This paper addresses the potential effects of the Doha round of trade negotiations on poverty and income distribution in Brazil, using an applied general equilibrium (AGE) and micro-simulation model of Brazil tailored for income distribution and poverty analysis. Of particular importance is the fact that the representative household hypothesis is replaced by a detailed representation of households. The model distinguishes 10 different labor types and has 270 different household expenditure patterns. Income can originate from 41 different production activities (which produce 52 commodities), located in 27 different regions in the country. The AGE model communicates to a micro-simulation model that has 112,055 Brazilian households and 263,938 adults. Poverty and income distribution indices are computed over the entire sample of households and persons, before and after the policy shocks. Model results show that even important trade policy shocks, such as those applied in this study, do not generate dramatic changes in the structure of poverty and income distribution in the Brazilian economy. The simulated effects on poverty and income distribution are positive, but rather small. The benefits are concentrated in the poorest households.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3701.

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Date of creation: 01 Sep 2005
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Handle: RePEc:wbk:wbrwps:3701
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  1. Mark Horridge, 2000. "ORANI-G: A General Equilibrium Model of the Australian Economy," Centre of Policy Studies/IMPACT Centre Working Papers op-93, Victoria University, Centre of Policy Studies/IMPACT Centre.
  2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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