Trade, Growth, and Poverty: A Selective Survey
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Summary:
This survey of the recent literature asks: how important is trade policy for poverty reduction? We consider the effects of openness on poverty in two components: the effect of openness on average income growth, and the effect on distribution for a given growth rate. Evidence from a variety of sources (cross-country and panel growth regressions, industry and firm-level research, and case studies) supports the view that trade openness contributes greatly to growth. Moreover, trade openness does not have systematic effects on the poor beyond its effect on overall growth. Trade policy is only one of many determinants of growth and poverty reduction. Trade openness has important positive spillovers on other aspects of reform, however, so that the correlation of trade with other pro-reform policies speaks to the advantages of making openness a primary part of the reform package.
Series:
Working Paper No. 2003/030
Subject:
Exports Income distribution International trade National accounts Personal income Trade liberalization Trade policy
English
Publication Date:
February 1, 2003
ISBN/ISSN:
9781451844931/1018-5941
Stock No:
WPIEA0302003
Pages:
51
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