TRADE LIBERALIZATION AND POVERTY SM

TRADE LIBERALIZATION AND POVERTY SM - TRADE LIBERALIZATION...

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TRADE LIBERALIZATION AND POVERTY – Winters, McCulloch, McKay Introduction - Most economists accept that, in the long run, open economies fare better in aggregate than closed ones. - However one of the steps towards openness – trade liberalization – harms poorer actors in the economy. - The paper examines evidence about whether developing countries’ own trade liberalizations have reduced or increased poverty. - We must have a conceptual framework decomposing the links between trade policy and poverty… - Winters attempts to decompose the link into steps and compile the evidence. - The authors sought evidence from experiences that might have parallels like domestic market liberalization and public sector retrenchments. - Authors survey the evidence under four headings - 1. Macroeconomic aspects - 2. Households and Markets - 3. Wages and employment - 4. Government revenue and spending - For no component can an unambiguous generalization be made either in theory or empirically. - This is because of the heterogeneity of poverty – so many reasons why people are poor. - Majority of empirical economic literature on poverty adopts an absolute income or consumption metric -- this is the method chosen in this paper. -
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TRADE LIBERALIZATION AND POVERTY SM - TRADE LIBERALIZATION...

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