Free Trade in Agriculture and Global Poverty

25 Pages Posted: 7 Feb 2012

See all articles by Maurizio Bussolo

Maurizio Bussolo

World Bank - Chief Economist Office for Europe and Central Asia

Rafael E. De Hoyos Navarro

World Bank

Denis Medvedev

World Bank; American University

Date Written: December 2011

Abstract

This paper assesses the potential impacts of the removal of agriculture trade distortions using a newly developed data set and methodological approach for evaluating the global poverty and inequality effects of policy reforms. It finds that liberalisation of agriculture and food could increase global extreme poverty by 0.2 per cent and lower moderate poverty by 0.3 per cent. Beneath these small aggregate changes, most countries witness a substantial reduction in poverty, while South Asia – where half of the world’s poor reside – experiences an increase in extreme poverty incidence owing to high rates of protection afforded to unskilled‐intensive agricultural sectors. The distributional changes are likely to be mild but exhibit a strong regional pattern. Inequality is likely to fall in regions such as Latin America, which are characterised by high initial inequality, and rise in regions like South Asia, characterised by low initial inequality.

Suggested Citation

Bussolo, Maurizio and De Hoyos, Rafael E. and Medvedev, Denis, Free Trade in Agriculture and Global Poverty (December 2011). The World Economy, Vol. 34, Issue 12, pp. 2019-2043, 2011. Available at SSRN: https://ssrn.com/abstract=2000485 or http://dx.doi.org/10.1111/j.1467-9701.2011.01405.x

Maurizio Bussolo (Contact Author)

World Bank - Chief Economist Office for Europe and Central Asia ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://https://blogs.worldbank.org/team/maurizio-bussolo

Rafael E. De Hoyos

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Denis Medvedev

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

American University

4400 Massachusetts Avenue N.W.
Washington, DC 20016-8029
United States

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