Effects of AFTA on Poverty: Evidence from Laos

Phouphet Kyophilavong, Richard Record (), Shinya Takamatsu, Konesawang Nghardsaysone () and Inpaeng Sayvaya ()
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Konesawang Nghardsaysone: World Bank, Postal: World Bank, Patou Xay, Nehru Road, Vientiane, Lao PDR
Inpaeng Sayvaya: Champasack University, Postal: Champasack University, Lao PDR, Pakse District, Champasack Province, Lao PDR

Journal of Economic Integration, 2016, vol. 31, issue 2, 353-376

Abstract: The Association of South-East Asian Nations Free Trade Agreement plays an important role in regional economic development. However, Association of South-East Asian Nations Free Trade Agreement’s contribution to poverty reduction remains unclear. Therefore, the main objective of this study is to assess the impact of Association of South-East Asian Nations Free Trade Agreement on poverty using Laos as a case study. To do so, we apply a Computable General Equilibrium model, microsimulation, and a logit model. Laos benefits from Association of South-East Asian Nations Free Trade Agreement but has also experienced an increase in its trade deficit. The primary benefits from Association of South-East Asian Nations Free Trade Agreement derive from the improvement in trade facilitation and a significant increase in Foreign Direct Investment. Association of South-East Asian Nations Free Trade Agreement may also reduce income inequality at the national level. However, Association of South-East Asian Nations Free Trade Agreement could cause disparities between the so-called winners and losers. The beneficiaries of Association of South-East Asian Nations Free Trade Agreement might be limited to households that have access to land, irrigation, road, and electricity.

Keywords: ssociation of South-East Asian Nations; Computable General Equilibrium Model; Laos; Microsimulation (search for similar items in EconPapers)
JEL-codes: F15 F17 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0688

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