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An Assessment of the Impact of Trade Liberalisation on Welfare in Pakistan: A General Equilibrium Analysis

A. R Kemal, Rehana Siddiqui (), Rizwana Siddiqui and M. Ali Kemal ()
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A. R Kemal: Pakistan Institute of Development Economics, Islamabad.

Authors registered in the RePEc Author Service: Abdul Razzaq Kemal

No 2003:16, MIMAP Technical Paper Series from Pakistan Institute of Development Economics

Abstract: Using Computable General Equilibrium Model, this paper assesses the impact of import liberalisation on macro aggregates and on the welfare of households. It uses benchmark data from Social Accounting Matrix for the year 1989-90 and simulates the impact of (i) removal of quota restrictions on imports of electric and non-electric equipment and transport equipment, (ii) reduction in import tariffs, and (iii) reduction in quota and tariff restriction in the presence of economic growth. The results of these simulation exercises indicate that reduction in quantitative restrictions on imports improves welfare of employees’ group of households in the urban areas. Welfare gain is the highest for the poorest group of households in the rural areas. Similarly, tariff reduction benefits employees more and (in the rural areas) than it does the medium-size landholders.

Pages: 42 pages
Date: 2003
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