Essays in Honour of Peter Lloyd, Volume II
Edited by Sisira Jayasuriya
Chapter 9: Agricultural trade reform and poverty reduction in developing countries
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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