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Poverty, Welfare and Income Distribution Implications of Reducing Trade Costs Through Deep Integration in Eastern and Southern Africa

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  • Edward J Balistreri
  • Maryla Maliszewska
  • Israel Osorio-Rodarte
  • David G Tarr
  • Hidemichi Yonezawa

Abstract

We examine regional and unilateral policies to reduce three kinds of trade costs in Eastern and Southern Africa. Our article is the first CGE-microsimulation model to assess the impacts of the reduction of trade costs on poverty and income of the poorest 40% of the population. We estimate significant reductions in the poverty headcount and increases in income for the poorest 40%. We find that trade facilitation would increase the ‘share’ of income of the poorest 40% of the population, however, services reform decreases the share. We find and explain why our three types of trade costs have very diverse impacts across the countries.

Suggested Citation

  • Edward J Balistreri & Maryla Maliszewska & Israel Osorio-Rodarte & David G Tarr & Hidemichi Yonezawa, 2018. "Poverty, Welfare and Income Distribution Implications of Reducing Trade Costs Through Deep Integration in Eastern and Southern Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 27(2), pages 172-200.
    • Handle: RePEc:oup:jafrec:v:27:y:2018:i:2:p:172-200.
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    References listed on IDEAS

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    1. Bourguignon, François & Bussolo, Maurizio, 2013. "Income Distribution in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1383-1437, Elsevier.
    2. Dirk Willenbockel, 2014. "A General Equilibrium Analysis of the COMESA-EAC-SADC Tripartite FTA," EcoMod2014 7232, EcoMod.
    3. Jesper Jensen & David Tarr, 2014. "Deep Trade Policy Options for Armenia: The Importance of Trade Facilitation, Services and Standards Liberalization," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 19, pages 453-508, World Scientific Publishing Co. Pte. Ltd..
    4. World Bank, 2012. "De-fragmenting Africa : Deepening Regional Trade Integration in Goods and Services [La défragmentation de l’Afrique : Approfondissement de l’intégration du commerce régional des biens et services]," World Bank Publications - Reports 12385, The World Bank Group.
    5. Thomas F. Rutherford & David G. Tarr, 2014. "Poverty effects of Russia's WTO accession: Modeling “real” households with endogenous productivity effects," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 12, pages 287-306, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. María C. Latorre & Zoryana Olekseyuk & Hidemichi Yonezawa, 2020. "Foreign multinationals in service sectors: A general equilibrium analysis of Brexit," The World Economy, Wiley Blackwell, vol. 43(11), pages 2830-2859, November.
    2. Shahrzad Safaeimanesh & Glenn P. Jenkins, 2020. "Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region," Sustainability, MDPI, vol. 13(1), pages 1-22, December.
    3. Charlotte Janssens & Petr Havlík & Tamás Krisztin & Justin Baker & Stefan Frank & Tomoko Hasegawa & David Leclère & Sara Ohrel & Shaun Ragnauth & Erwin Schmid & Hugo Valin & Nicole Van Lipzig & Miet M, 2020. "Global hunger and climate change adaptation through international trade," Nature Climate Change, Nature, vol. 10(9), pages 829-835, September.
    4. Maliszewska,Maryla & Osorio-Rodarte,Israel & Nichanametla Ramasubbaiah,Rakesh Gupta, 2020. "Ex-Ante Evaluation of Sub-National Labor Market Impacts of Trade Reforms," Policy Research Working Paper Series 9478, The World Bank.

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