Trade Policy Reforms and Development

Trade Policy Reforms and Development

Essays in Honour of Peter Lloyd, Volume II

Edited by Sisira Jayasuriya

Trade Policy Reforms and Development, comprises 11 essays offering new contributions on the following topics: globalisation and political economy of trade; trade, labour standards and economic crisis; the changing role of the WTO; competition policy and the WTO; choice of formulas for market access negotiations; regionalism and bilateralism in ASEAN; ANZUS free trade agreement; new criteria for optimum currency areas; trade policy and poverty in Asia; impact of agricultural trade reforms on poverty; and recent behaviour of US imports.

Chapter 9: Agricultural trade reform and poverty reduction in developing countries

Kym Anderson

Subjects: economics and finance, international economics


Kym Anderson* The f rst of the eight Millennium Development Goals articulated at the UN fi General Assembly in 2000 was to halve by 2015 the proportion of people in absolute poverty, that is, those living on less than US$1 per day and suffering from hunger. Throughout most of the nineteenth and twentieth centuries, the number of people in the world that were poverty stricken to that extent had been increasing almost continually (Bouguignon and Morrisson, 2002). Since the late 1970s, however, the number has declined by more than 200 million (Sala-i-Martin, 2002). Remarkable though that recent achievement has been in such a short period, the World Bank estimates that there were still as many as one in f ve people, or 1.2 billion, below that poverty line fi in 2000 (for example, Collier and Dollar, 2002, Figure 3).1 Efforts to alleviate poverty for those remaining poor people, if they are to be successful, need to be based on a clear understanding of the reasons behind successful alleviation to date. The evidence presented by Salai-Martin suggests that aggregate economic growth differences have been largely responsible for the differences in poverty alleviation across regions, a finding supported by numerous other studies (for example, Dollar and Kraay, 2002). Initiatives that boost economic growth are therefore likely to be helpful in the fight against absolute poverty. Trade liberalization is such an initiative that tends to boost economic growth.2 But it also alters relative product prices, which in turn a...

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