Trade, Growth, and Poverty: A Selective Survey

51 Pages Posted: 28 Jan 2006

See all articles by Andrew Berg

Andrew Berg

International Monetary Fund (IMF) - Developing Country Studies Division

Anne O. Krueger

International Monetary Fund (IMF); Stanford University - Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: February 2003

Abstract

This survey of the recent literature asks: how important is trade policy for poverty reduction? We consider the effects of openness on poverty in two components: the effect of openness on average income growth, and the effect on distribution for a given growth rate. Evidence from a variety of sources (cross-country and panel growth regressions, industry and firm-level research, and case studies) supports the view that trade openness contributes greatly to growth. Moreover, trade openness does not have systematic effects on the poor beyond its effect on overall growth. Trade policy is only one of many determinants of growth and poverty reduction. Trade openness has important positive spillovers on other aspects of reform, however, so that the correlation of trade with other pro-reform policies speaks to the advantages of making openness a primary part of the reform package.

Keywords: Trade, growth, poverty, income distribution, trade protection, openness

JEL Classification: F13, F14, F15, F43, I30, 019

Suggested Citation

Berg, Andrew and Krueger, Anne O., Trade, Growth, and Poverty: A Selective Survey (February 2003). IMF Working Paper No. 03/30, Available at SSRN: https://ssrn.com/abstract=879105

Andrew Berg (Contact Author)

International Monetary Fund (IMF) - Developing Country Studies Division ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8843 (Phone)
202-589-8843 (Fax)

Anne O. Krueger

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Stanford University - Graduate School of Business ( email )

579 Serra Mall
Stanford, CA 94305
United States
650-723-0188 (Phone)
650-723-8611 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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