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Gains from Trade: Implications for Labour Market Adjustment and Poverty Reduction in Africa

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Author Info
Fosu, Augustin Kwasi
Mold, Andrew

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Abstract

This paper reassesses the gains from trade for sub-Saharan Africa, and draws their implications for labour market adjustment and poverty reduction. It reviews previous studies on multilateral liberalization, focusing on the findings from computable general equilibrium (CGE) models with relevance to African economies. The implications of these findings for poverty reduction are discussed. Our own CGE exercise supports the hypothesis that African countries cannot expect substantial gains from further multilateral liberalization. Moreover, given the sharp contraction of import-competing sectors in response to trade liberalization in many African economies, coupled with insufficient compensation through labour market adjustments in other sectors, this study suggests that the ultimate impact on poverty reduction is likely to be small or even negative.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper RP2007/65.

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Length: 26 pages
Date of creation: 2007
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Handle: RePEc:unu:wpaper:rp2007-65

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Related research
Keywords: trade; openness; liberalization; poverty reduction;

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  1. C. Henry, 2005. "The end of poverty: How we can make it happen in our lifetime," The Review of Black Political Economy, Springer, vol. 33(2), pages 61-68, December. [Downloadable!] (restricted)
  2. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," CEPR Discussion Papers 5049, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Lussier, Martine, 1993. "Impacts of Exports on Economic Performance: A Comparative Study," Journal of African Economies, Oxford University Press, vol. 2(1), pages 106-27, May.
  4. Ha Yan Lee & Luca Antonio Ricci & Roberto Rigobon, 2004. "Once Again, is Openness Good for Growth?," NBER Working Papers 10749, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Fosu, Augustin Kwasi, 1990. "Exports and economic growth: The African case," World Development, Elsevier, vol. 18(6), pages 831-835, June. [Downloadable!] (restricted)
  6. Ahmad, Jaleel & Kwan, Andy C. C., 1991. "Causality between exports and economic growth : Empirical evidence from Africa," Economics Letters, Elsevier, vol. 37(3), pages 243-248, November. [Downloadable!] (restricted)
  7. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Sources of Slow Growth in African Economies," Journal of African Economies, Oxford University Press, vol. 6(3), pages 335-76, October.
  8. Jeffrey A. Frankel & David Romer, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June. [Downloadable!] (restricted)
  9. Fosu, Augustin Kwasi, 1990. "Export composition and the impact of exports on economic growth of developing economies," Economics Letters, Elsevier, vol. 34(1), pages 67-71, September. [Downloadable!] (restricted)
  10. Ravallion, Martin, 2004. "Looking beyond averages in the trade and poverty debate," Policy Research Working Paper Series 3461, The World Bank. [Downloadable!]
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  11. Savvides, Andreas, 1995. "Economic growth in Africa," World Development, Elsevier, vol. 23(3), pages 449-458, March. [Downloadable!] (restricted)
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