Trade Policy and Poverty in Benin: A General Equilibrium Analysis

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

Suggested Citation: Suggested Citation

Decaluwe, Bernard and Adjovi, Épiphane and Robichaud, Veronique, Trade Policy and Poverty in Benin: A General Equilibrium Analysis (September 1, 2008). PEP working paper serie 2008-14, Available at SSRN: https://ssrn.com/abstract=3171505 or http://dx.doi.org/10.2139/ssrn.3171505