Trade Liberalization and Poverty: A Handbook
This Handbook, published with the Department for International Development (DFID), examines how openness to trade is a key element of economic policy; continuing extreme poverty in developing countries is a disgrace. This Handbook examines how our concerns about the world�s poor should affect our attitude towards and implementation of trade liberalization.
Part I draws on economic analysis and practical experience to construct a framework to analyse the complex links between trade liberalization and poverty. It shows policy-makers how to use the framework to identify the critical features in their economies so they can ensure that the poor benefit from liberalization. Part II explores the links in relation to reform of particular sectors - agriculture, services, etc. � and particular instruments of trade policy - export subsidies, anti-dumping measures, etc.. It presents an economic analysis of each type of reform, shows the likely outcome for the poor, and, where appropriate, discusses the issue�s status in the World Trade Organisation�s agenda.
Among the book�s conclusions are that:
Trade liberalization ultimately helps poverty alleviation by stimulating growth, but appropriate complementary policies in areas such as transport, infrastructure, education, and financial services are essential to ensure that the poor benefit from this growth.
Trade liberalization also affects poverty more directly, via the prices of goods, wages and employment, and government revenue. In some cases, the poor can suffer.
Appropriate domestic policies can reduce the number of such cases and help to alleviate the pain where suffering does occur.
The principal benefits of trade reform come from unilateral trade liberalization, but the poor would also benefit considerably from substantially improved access to markets in the developed world.
While the links between trade and poverty are many and complex, the main ones are usually fairly obvious, so governments can devise policies to help the poor gain from liberalization.
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