Globalization and Complementary Policies: Poverty Impacts in Rural Zambia

42 Pages Posted: 30 Mar 2005 Last revised: 16 Jul 2022

See all articles by Jorge F. Balat

Jorge F. Balat

University of Texas at Austin - Department of Economics

Guido G. Porto

World Bank; National Bureau of Economic Research (NBER)

Date Written: March 2005

Abstract

In this paper, we have two main objectives: to investigate the links between globalization and poverty observed in Zambia during the 1990s, and to explore the poverty impacts of non-traditional export growth. We look at consumption and income effects separately. On the consumption side, we study the maize marketing reforms and the elimination of maize subsidies. We find that complementary policies matter: the introduction of competition policies at the milling industry acted as a cushion that benefited consumers but the restriction on maize imports by small-scale mills hurt them. On the income side, we study agricultural export growth to estimate income gains from international trade. The gains are associated with market agriculture activities (such as growing cotton, tobacco, hybrid maize) and rural labor markets and wages. We find that by expanding trade opportunities Zambian households would earn significantly higher income. Securing these higher levels of well-being requires complementary policies, like the provision of infrastructure, credit, and extension services.

Suggested Citation

Balat, Jorge F. and Porto, Guido, Globalization and Complementary Policies: Poverty Impacts in Rural Zambia (March 2005). NBER Working Paper No. w11175, Available at SSRN: https://ssrn.com/abstract=684701

Jorge F. Balat (Contact Author)

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Guido Porto

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