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Trade, Growth, and Poverty: A Selective Survey

Author/Editor: Berg, Andrew | Krueger, Anne O.
Authorized for Distribution: February 1, 2003
Electronic Access: Free Full Text (PDF file size is 1,933KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

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.
 
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Series: Working Paper No. 03/30
Subject(s): Trade | Economic growth | Poverty | Income distribution | Protectionism
Author's keyword(s): Trade | growth | poverty | income distribution | trade protection | openness
 
English  
    Published:   February 1, 2003        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA0302003   Pages:   50
    Price:   US$15.00 (Academic Rate: US$15.00 )
       
     
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