Using Survey Data to Assess the Distributional Effects of Trade Policy
The author develops and applies a methodology to empirically explore the effects of trade policies on the distribution of income and poverty in developing countries. He uses a methodology based on two links-one connecting trade policies to prices,...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/09/2534253/using-survey-data-assess-distributional-effects-trade-policy http://hdl.handle.net/10986/18056 |
| Summary: | The author develops and applies a
methodology to empirically explore the effects of trade
policies on the distribution of income and poverty in
developing countries. He uses a methodology based on two
links-one connecting trade policies to prices, and another
connecting prices to household welfare. The author applies
the methodology to the study of the distributional effects
of Mercosur on Argentine families. The main finding is that
Mercosur benefits the average Argentine household across the
entire income distribution. There is evidence of a pro-poor
bias of the regional trade agreement: on average, poor
households gain more from the reform than middle-income
households, whereas the effects on rich families are
positive but not statistically significant. Prior to the
reform, Argentine trade policy protected the rich over the
poor, and after the reform, granted some protection to the
poor. As relative pre-Mercosur tariffs are higher on
relatively skill-intensive goods, the tariff removals tend
to benefit the poor over the rich. These findings indicate
that trade reforms may actually help improve the
distribution of income and reduce poverty in the country. |
|---|