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Trade reforms and welfare : an ex-post decomposition of income in Vietnam

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  • Isik-Dikmelik, Aylin

Abstract

This paper analyzes the impact of trade reforms on household welfare. In particular, it studies the importance of each of the links that together constitute the impact using data from the Vietnamese experience in the 1990s. The implementation of trade reforms in the 1990s, most noteworthy of which was the liberalization of rice, resulted in substantial improvement in welfare as evidenced by the drastic decline in poverty. Using analytical and empirical methods, the author examines the role of each channel (direct versus indirect) in this improvement for different groups of households. Results indicate that the growth has been broad based and pro-poor. Poorer households experienced more growth for each and every group analyzed. And contrary to the standard literature, net buyer households had more growth compared with net sellers, emphasizing the importance of indirect links. Decomposition of the growth shows that for rural households, both the direct effect and the multiplier effect drive growth while the multiplier effect was key in urban areas. The importance of the secondary effects underscores the need for a broader model to estimate the impact of trade reforms fully.

Suggested Citation

  • Isik-Dikmelik, Aylin, 2006. "Trade reforms and welfare : an ex-post decomposition of income in Vietnam," Policy Research Working Paper Series 4049, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4049
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    References listed on IDEAS

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    14. repec:pru:wpaper:17 is not listed on IDEAS
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    Cited by:

    1. Cazzuffi, Chiara & McKay, Andrew, 2012. "Rice market participation and channels of sale in rural Vietnam," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126566, International Association of Agricultural Economists.
    2. Ebenezer OLUBIYI, 2015. "Effects of Trade Facilitation on Inequality: A Case Study of Sub-Sahara Africa," Turkish Economic Review, KSP Journals, vol. 2(3), pages 169-185, September.
    3. Kareem, Olayinka Idowu, 2015. "The Distributional Effects of ECOWAS Common External Tariffs in a Rich Country with Poor People," Conference papers 332648, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Aksoy, M. Ataman & Isik-Dikmelik, Aylin, 2007. "The role of services in rural income : the case of Vietnam," Policy Research Working Paper Series 4180, The World Bank.
    5. Talukder, Dayal & Chile, Love, 2014. "Characteristics of Rice Cultivation and Rural Rice Market in Bangladesh: Evidence from a Survey," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), pages 1-17.
    6. Aksoy , M. Ataman & Isik-Dikmelik, Aylin, 2008. "Are low food prices pro-poor ? net food buyers and sellers in low-income countries," Policy Research Working Paper Series 4642, The World Bank.

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    More about this item

    Keywords

    Rural Poverty Reduction; Economic Theory&Research; Small Area Estimation Poverty Mapping; Inequality; Consumption;
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