Impact of Trade Liberalization on Poverty in Bangladesh

Bodrun Nahar and Mahinda Siriwardana ()
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Bodrun Nahar: Bodrun Nahar is an Associate Professor in Department of Economics, University of Chittagong and currently, a PhD candidate, School of Business, Economics and Public Policy, University of New England, NSW 2351, Australia. Email: bnahar2@une.edu.au

South Asia Economic Journal, 2009, vol. 10, issue 2, 325-369

Abstract: This article uses a computable general equilibrium (CGE) model to investigate the impact of trade liberalization on poverty in Bangladesh. The simulation results show that the complete removal of tariffs favours export-oriented sectors in the economy. With trade liberalization, rural and urban areas experience an overall reduction in poverty in the short run. However, a marginal increase in the poverty gap and severity of poverty for urban areas is projected, implying that the poor become poorer in urban areas. Moreover, poverty incidences vary among various socio-economic groups. In the short run, poverty incidence increases for rural landless and urban illiterate and low-educated household groups. In contrast, the long-run results highlight that trade liberalization reduces absolute poverty for all groups, both in rural and urban areas.

Keywords: JEL: F13; JEL: I32; JEL: C68; Bangladesh; Computable General Equilibrium (CGE); Poverty; Trade; Trade Policy (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:soueco:v:10:y:2009:i:2:p:325-369

DOI: 10.1177/139156140901000204

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