Seeking Shared Prosperity through Trade

Cali, Massimiliano ; Hollweg, Claire H. ; Ruppert Bulmer, Elizabeth

World Bank, Washington, DC

关键词: NEW MARKET;    MARKET STRUCTURE;    ECONOMIC GROWTH;    CLOSED ECONOMIES;    PRODUCTION;   

DOI  :  10.1596/1813-9450-7314
RP-ID  :  WPS7314

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Increasing the trade integration ofdeveloping countries can make a vital contribution toboosting shared prosperity, but it also exposes producersand consumers to exogenous shocks that alter relativeprices, sometimes positively and sometimes negatively. Thispaper discusses the short-run effects of trade-relatedshocks on households to capture the potential welfare impacton the poor. The discussion explores the channels throughwhich trade shocks are transmitted to households in thebottom of the income distribution, namely throughconsumption, household production, and market-based laboractivities. The degree to which price shocks are passedthrough from borders to point of sale is a key determinantof the gains from trade and the ultimate welfare impact.Trade changes in agriculture directly affect householdsthrough their consumption basket. Lower agricultural pricesreduce the cost of consumables, but these welfare gains maybe offset by lower earnings for households that producethese same goods. Poorer households tend to be net consumersof agricultural products, suggesting a net welfare gain, butagricultural wage workers could suffer from wage cuts.Because poorer households tend to consume relatively fewernonagricultural products, that is nonessentials, anytrade-related shocks to prices of nonagricultural productare likely to be transmitted via labor channels. Despitesignificant evidence that nonagricultural trade reformultimately leads to job creation and enhanced productivity,the short-run effects can be mixed. The costs incurred byworkers to transition to new jobs slow the adjustment of theeconomy to a new steady state. Labor mobility costs, whichtend to be higher in developing countries and for unskilledworkers, reduce the potential gains to trade by divertinglabor market adjustment from its most efficient path.