How Does Viet Nam's Accession to the World Trade Organization Change the Spatial Incidence of Poverty?

UNU-WIDER Research Paper No. 2007/12

42 Pages Posted: 31 Mar 2007

See all articles by Tomoki Fujii

Tomoki Fujii

Singapore Management University - School of Economics

David Roland-Holst

University of California, Berkeley

Date Written: March 2007

Abstract

Trade policies can promote aggregate efficiency, but the ensuing structural adjustments generally create both winners and losers. From an incomes perspective, trade liberalization can raise GDP per capita, but rates of emergence from poverty depend upon individual household characteristics of economic participation and asset holding. To more fully realize the growth potential of trade, while limiting the risk of rising inequality, policies need to better account for microeconomic heterogeneity. One approach to this is the geographic targeting, which shifts resources to poor areas. This study combines an integrated microsimulation-CGE model with the small area estimation to estimate the spatial incidence of Viet Nam's accession to the World Trade Organization. Provincial-level poverty reduction after full liberalization was heterogeneous, ranging from 2.2% to 14.3%. Full liberalization will benefit the poor on a national basis, but northwestern area of Viet Nam is likely to lagged behind. Furthermore, poverty can be shown to increase under comparable scenarios.

Keywords: Trade liberalization, microsimulation, computational general equilibrium, small-area estimation, Viet Nam

JEL Classification: C68, F15, I32, O53

Suggested Citation

Fujii, Tomoki and Roland-Holst, David, How Does Viet Nam's Accession to the World Trade Organization Change the Spatial Incidence of Poverty? (March 2007). UNU-WIDER Research Paper No. 2007/12. Available at SSRN: https://ssrn.com/abstract=975738 or http://dx.doi.org/10.2139/ssrn.975738

Tomoki Fujii (Contact Author)

Singapore Management University - School of Economics ( email )

90 Stamford Road
178903
Singapore
+6568280279 (Phone)
+6568280833 (Fax)

HOME PAGE: http://www.mysmu.edu/faculty/tfujii/

David Roland-Holst

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

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