Pro-poor trade policy in Sub-Saharan Africa

Marcelo Olarreaga, Alessandro Nicita and Guido Porto

No 8594, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The objective of this paper is to estimate the potential pro-poor bias in the existing structure of protection in six countries in Sub-Saharan Africa (SSA) (i.e., whether it redistributes income from rich to poor households). We also explore the extent to which the barriers faced by SSA exporters to the rest of the world are biased in favor of poor or rich households. To this end, we start with a simple agricultural household production model and propose an extension to include adjustments in labor income associated with changes in unskilled and skilled wages. We then build indicators that capture the differences in welfare changes across income levels associated with the elimination of SSA's own trade protection, as well as trade protection on SSA's export bundle by the rest of the world. Results suggest that SSA's own trade policy is biased in favor of poor households. In contrast, the trade policies of SSA's trading partners tend to be biased in favor of SSA's rich households, especially when ad-valorem equivalents of non tariff measures (NTMs) are taken into account.

Keywords: Poverty; Sub-saharan africa; Trade policy; Wage elasticities (search for similar items in EconPapers)
JEL-codes: F13 F16 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-afr, nep-agr, nep-cis, nep-dev, nep-int and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Pro-poor trade policy in Sub-Saharan Africa (2014)
Working Paper: Pro-Poor Trade Policy in Sub-Saharan Africa (2012)
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