Trade Policy and Poverty in Benin: A General Equilibrium Analysis

Poverty and Economic Policy Research Network Working Paper No. MPIA-2008-14

16 Pages Posted: 25 Nov 2008

See all articles by Bernard Decaluwe

Bernard Decaluwe

Université Laval - Département d'Économique

Veronique Robichaud

Université Laval

Multiple version iconThere are 2 versions of this paper

Date Written: September 15, 2008

Abstract

Economic and financial crisis in Benin since 1980s led the government to embark on a process of economic reforms in 1991. These reforms sought to remedy the fiscal and trade imbalances in order to accelerate economic growth. Trade policy reform was given priority. Import bans and quotas were eliminated, import duties abolished and a compensatory tax on commodities sold in the domestic market instituted. This study analyzes the effects of the trade policy reforms using a computable general equilibrium (CGE) model and household survey data. Results show that these reforms are more beneficial to households in urban areas, but contribute to worsening poverty conditions of the most poor in rural areas. If liberalization policies target better strategies aimed at fighting poverty, or at least not deteriorating the situation, they need to be designed in a way that they do not worsen the poverty conditions of the most destitute in society.

Keywords: CGE, trade, poverty, Benin

JEL Classification: D6, F13, F14, H3, I38, O55

Suggested Citation

Decaluwe, Bernard and Robichaud, Veronique, Trade Policy and Poverty in Benin: A General Equilibrium Analysis (September 15, 2008). Poverty and Economic Policy Research Network Working Paper No. MPIA-2008-14, Available at SSRN: https://ssrn.com/abstract=1306604 or http://dx.doi.org/10.2139/ssrn.1306604

Bernard Decaluwe (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-5561 (Phone)
418-656-7798 (Fax)

Veronique Robichaud

Université Laval ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

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