Are the Poor Getting Globalized?

20 Pages Posted: 11 Oct 2018 Last revised: 16 Oct 2018

See all articles by Adelina Mendoza

Adelina Mendoza

World Trade Organization (WTO)

Gaurav Nayyar

University of Oxford

Roberta Piermartini

World Trade Organization (WTO) - Economic Research and Analysis Division

Date Written: October 10, 2018

Abstract

One reason that poor people may not capture the full benefit from participation in international markets is that the goods they produce tend to be subject to relatively high trade barriers. This paper analyzes market access barriers faced by households in different income deciles by matching household survey data from India based on the industrial classification of their economic activity. Tariffs in international markets are higher, and nontariff measures more numerous, on goods produced by poor workers than on goods produced by rich workers. Tariffs faced by exporters are higher on goods produced in rural and more remote areas than on those in urban centers, on goods produced by informal enterprises than by formal ones, and on goods produced by women than by men. Furthermore, the global reduction in tariffs from 1996 to 2012 failed to ameliorate these differences. How did we get there? Efforts to protect poor workers across countries resulted in a coordination problem. Indeed, tariff protection in China and the United States is higher on goods produced by poor workers than on goods produced by rich workers. Therefore, if poor workers are employed in similar sectors, then each country's attempts to protect its poor workers by imposing higher tariffs and more nontariff measures on such goods will reduce the access of all poor workers to international markets, and thus limit the gains from trade.

Keywords: International Trade and Trade Rules, Inequality, Trade Policy, Rules of Origin, Trade and Multilateral Issues

Suggested Citation

Mendoza, Adelina and Nayyar, Gaurav and Piermartini, Roberta, Are the Poor Getting Globalized? (October 10, 2018). World Bank Policy Research Working Paper No. 8609, Available at SSRN: https://ssrn.com/abstract=3264450

Adelina Mendoza (Contact Author)

World Trade Organization (WTO) ( email )

Rue de Lausanne 154
Geneva 21, CH-1211
Switzerland

Gaurav Nayyar

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Roberta Piermartini

World Trade Organization (WTO) - Economic Research and Analysis Division ( email )

Rue de Lausanne 154
CH-1211 Geneva
Switzerland
+41 22 739 5492 (Phone)
+41 22 739 5762 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
84
Abstract Views
510
Rank
557,575
PlumX Metrics