Poverty and Shared Prosperity Implications of Deep Integration in Eastern and Southern Africa

Balistreri, Edward J. ; Maliszewska, Maryla ; Osorio-Rodarte, Israel ; Tarr, David G. ; Yonezawa, Hidemichi

World Bank, Washington, DC

关键词: TARIFFS;    URUGUAY ROUND;    EXPORT MARKETS;    MARKET STRUCTURE;    MULTILATERAL TRADE;   

DOI  :  10.1596/1813-9450-7660
RP-ID  :  WPS7660

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Evidence indicates that trade costs area much more substantial barrier to trade than tariffs are,especially in Sub-Saharan Africa. This paper decomposestrade costs into: (i) trade facilitation, (ii) non-tariffbarriers, and (iii) the costs of business services. Thepaper assesses the poverty and shared prosperity impacts ofdeep integration to reduce these three types of trade costsin: (i) the East African Customs Union–Common Market of Eastand Southern Africa–South African Development Community"Tripartite" Free Trade Area; (ii) within the EastAfrican Customs Union; and (iii) unilaterally by the EastAfrican Customs Union. The analysis employs an innovative,multi-region computable general equilibrium model toestimate the changes in the macroeconomic variables thatimpact poverty and shared prosperity. The model estimatesare used in the Global Income Distribution Dynamicsmicrosimulation model to obtain assessments of the changesin the poverty headcount and shared prosperity for each ofthe simulations for the six African regions or countries.The paper finds that these reforms are pro-poor. There aresignificant reductions in the poverty headcount and thepercentage of the population living in poverty for all sixof the African regions from deep integration in theTripartite Free Trade Area or comparable unilateral reformsby the East African Customs Union. Further, the incomes ofthe bottom 40 percent of the populations noticeably increasein all countries or regions that are engaged in the tradereforms. The reason for the poor share in prosperity is thefact that the reforms increase unskilled wages faster thanthe rewards of other factors of production, as the reformstend to favor agriculture. Despite the uniform increases inincome for the poorest 40 percent, there are some caseswhere the share of income captured by the poorest 40 percentof the population decreases. The estimated gains varyconsiderably across countries and reforms. Thus, countrieswould have an interest in negotiating for different reformsin different agreements.