Trade, Growth, and Poverty: A Selective Survey

Andrew Berg () and Anne Krueger

No 2003/030, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; trade openness; liberalization episode; trade reform; infant industry argument; trade share; Trade; growth; poverty; income distribution; trade protection; openness; per capita income; impact trade liberalization; trade liberalizations in the presence; liberalization event study; Trade liberalization; Personal income; Exports; Trade policy; East Asia; South Asia; Africa; Asia and Pacific; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 51
Date: 2003-02-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (137)

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