IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/4049.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/10/25/000016406_20061025142437/Rendered/PDF/wps4049.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Porto, Guido G., 2015. "Estimating household responses to trade reforms: Net consumers and net producers in rural Mexico," International Economics, Elsevier, vol. 144(C), pages 116-142.
    2. Dwayne Benjamin & Loren Brandt, 2002. "Agriculture and Income Distribution in Rural Vietnam under Economic Reforms: A Tale of Two Regions," Working Papers benjamin-02-01, University of Toronto, Department of Economics.
    3. JULIE LITCHFIELD & NEIL McCULLOCH & L. ALAN WINTERS, 2015. "Agricultural Trade Liberalization And Poverty Dynamics In Three Developing Countries," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 17, pages 367-373, World Scientific Publishing Co. Pte. Ltd..
    4. Porto, Guido G., 2003. "Trade reforms, market access, and poverty in Argentina," Policy Research Working Paper Series 3135, The World Bank.
    5. Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
    6. L. Alan Winters, 2015. "Trade Liberalisation and Poverty: What are the Links?," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 13, pages 241-269, World Scientific Publishing Co. Pte. Ltd..
    7. Mellor, John W, 1978. "Food Price Policy and Income Distribution in Low-Income Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 27(1), pages 1-26, October.
    8. Christopher B. Barrett & Paul A. Dorosh, 1996. "Farmers' Welfare and Changing Food Prices: Nonparametric Evidence from Rice in Madagascar," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 656-669.
    9. Dercon, Stefan, 2006. "Economic reform, growth and the poor: Evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 81(1), pages 1-24, October.
    10. Nicita, Alessandro, 2004. "Who benefited from trade liberalization in Mexico? Measuring the effects on household welfare," Policy Research Working Paper Series 3265, The World Bank.
    11. Dominique Van De Walle & Dorothyjean Cratty, 2004. "Is the emerging non‐farm market economy the route out of poverty in Vietnam?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(2), pages 237-274, June.
    12. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
    13. Budd, John W, 1993. "Changing Food Prices and Rural Welfare: A Nonparametric Examination of the Cote d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 587-603, April.
    14. repec:pru:wpaper:17 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seshan, Ganesh, 2005. "The impact of trade liberalization on household welfare in vietnam," Policy Research Working Paper Series 3541, The World Bank.
    2. Sylvain Chabe-Ferret & Julien Gourdon & Mohamed Ali Marouani & Tancrède Voituriez, 2007. "Trade-Induced Changes in Economic Inequality: Assessment Issues and Policy Implications for Developing Countries," Working Papers DT/2007/11, DIAL (Développement, Institutions et Mondialisation).
    3. 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.
    4. repec:dau:papers:123456789/4331 is not listed on IDEAS
    5. Klugman, Jeni & Loening, Josef, 2007. "Welfare Impacts of Food Price Inflation in Ethiopia," MPRA Paper 24892, University Library of Munich, Germany.
    6. Vergez, Antonin, 2007. "Agricultural Price Seasonality and Market Failure: Examining the Net Seller Household and the Net Benefit Ratio Definition," 106th Seminar, October 25-27, 2007, Montpellier, France 7911, European Association of Agricultural Economists.
    7. Celia M. Reyes & Alellie B. Sobrevinas & Joel Bancolita & Jeremy de Jesus, 2009. "Analysis of the Impact of Changes in the Prices of Rice and Fuel on Poverty in the Philippines," Development Economics Working Papers 22687, East Asian Bureau of Economic Research.
    8. Pham Van Ha & Hoa Thi Minh Nguyen & Tom Kompas & Tuong Nhu Che & Bui Trinh, 2015. "Rice Production, Trade and the Poor: Regional Effects of Rice Export Policy on Households in Vietnam," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(2), pages 280-307, June.
    9. Dawe, David & Maltsoglou, Irini, 2014. "Marketing margins and the welfare analysis of food price shocks," Food Policy, Elsevier, vol. 46(C), pages 50-55.
    10. Zezza, Alberto & Davis, Benjamin & Azzarri, Carlo & Covarrubias, Katia & Tasciotti, Luca & Anríquez, Gustavo, 2008. "The impact of rising food prices on the poor," ESA Working Papers 289027, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    11. repec:pru:wpaper:30 is not listed on IDEAS
    12. Trung X. Hoang & Cong S. Pham & Mehmet A. Ulubaşoğlu, 2016. "The role of rice in poverty dynamics in rural Vietnam: 2002–2008," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(1), pages 132-150, January.
    13. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.
    14. David Dawe & Irini Maltsoglou, 2009. "Analyzing the Impact of Food Price Increases: Assumptions about Marketing Margins can be Crucial," Working Papers 09-02, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    15. Juhee Singh Verma & Pritee Sharma, 2021. "Vulnerability of Small Farmers to High Food Prices – A Case Study of Indian Farmers," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 74-88.
    16. Charles Ackah, & Simon Appleton, 2007. "Food Price Changes and Consumer Welfare in Ghana in the 1990s," Discussion Papers 07/03, University of Nottingham, CREDIT.
    17. Coulombe, Harold & Wodon, Quentin, 2008. "Assessing the geographic impact of higher food prices in Guinea," Policy Research Working Paper Series 4743, The World Bank.
    18. G. Jacoby , Hanan & Dasgupta, Basab, 2014. "Household Exposure to Food Price Shocks in Rural Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(1-2), pages 83-100, March-Jun.
    19. Sami Bibi & Massa Coulibaly & John Cockburn & Luca Tiberti, 2009. "L'impact de la hausse des prix des produits alimentaires sur la pauvreté des enfants et les reponses politiques au Mali," Papers inwopa09/60, Innocenti Working Papers.
    20. Ben Groom & Mehroosh Tak, 2013. "Welfare Analysis of Changing Food Prices: A Nonparametric Examination of Export Ban on Rice in India," Working Papers 177, Department of Economics, SOAS University of London, UK.
    21. Barrett, Christopher B., 1996. "On price risk and the inverse farm size-productivity relationship," Journal of Development Economics, Elsevier, vol. 51(2), pages 193-215, December.
    22. Depetris Chauvin, Nicolas & Porto, Guido G., 2011. "Market Competition in Export Cash Crops and Farm Income," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126159, International Association of Agricultural Economists.

    More about this item

    Keywords

    Rural Poverty Reduction; Economic Theory&Research; Small Area Estimation Poverty Mapping; Inequality; Consumption;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4049. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.