Journal Press India^®

Author Details ( * ) denotes Corresponding author

The growing volumes of international trade and lowering of tariff barriers have triggered continuing debate and analysis on the impact of international trade on poverty. The United Nations has identified eradication of poverty – especially of extreme poverty – as its number one Millennium Development Goal (MDG). This paper tries to assess the relevance of trade in reducing poverty in India and promoting pro-poor growth through a survey of the existing literature and concludes that a strong performance on the international market can help reduce domestic poverty in developing countries. Through a review of the literature on this topic, the author finds that there is strong empirical evidence in favour of the growth enhancing effects of exports and trade in general. Furthermore, a number of detailed microeconomic studies using firm-level and household data show that exporting can lead to productivity, growth and directly reduce poverty through wage and employment effects.

Keywords

Trade; Trade policy; Poverty; Economic growth; Exports

1. Acharyya, R (2006). Trade liberalization, poverty, and income inequality in India. INRM policy brief no. 10, Asian Development Bank.
2. Barro, R. (2000). Inequality and growth in a panel of countries. Journal of Economic Growth, 5(1), 5-32.
3. Berg, A. & Krueger, A. (2003). Trade, growth and poverty: A selective survey. IMF Working Paper, 03/30.
4. Bhagwati, J. & Srinivasan, T. N. (2002). Trade and poverty in the poor countries. American Economic Review. 92(2), 180–183.
5. Balassa, B., 1971. The structure of protection in developing countries. Baltimore, MD: Johns Hopkins University Press.
6. Biesebroeck, J. V. (2005). Exporting raises productivity in sub-Saharan African manufacturing firms. Journal of International Economics, 67(2), 373-391.
7. Bigsten, A. (2004). Exports and firm-level efficiency in African manufacturing. Centre for the Study of African Economies, Oxford University, WPS/2000.
8. Blalock, G. & Gertler, J. (2004). Learning from exporting revisited in a less developed setting. Journal of Development Economics, 75(2), 397-416.
9. Calderon, C., Loayza, N., & Schmidt-Hebbel, K., (2005). Does openness imply greater exposure? World Bank Policy Research Working Paper, No 3733.
10. Chand, R. (1999). Effects of Trade Liberalization on Agriculture in India: Commodity Aspects. CGPRT Centre Working paper No. 45.
11. Chang, R., Katlani, L. & Loayza, N. (2005). Openness can be good for growth: The role of policy complementarities. Processed, World Bank, Washington DC. Retrieved from https://pdfs.semanticscholar.org/c4b3/a754d59b4eb513e4ff00a69ea8e9b698350e.pdf
12. Coe, D. T. & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39(5), 859–87.
13. Dollar, D. & Kraay, A. (2001). Trade, growth, and poverty.  World Bank Policy Research Working Paper No. 2615, April. Available at https://ssrn.com/abstract=632684
14. Dollar, D. & Kraay, A. (2002). Growth is good for the poor. Journal of Economic Growth, 7(3), 195–225.
15. Deaton, A. (2005). Measuring poverty in a growing world (or measuring growth in a poor world). The Review of Economics and Statistics, 87(1), 1–19.
16. Easterly, W. & Levine, R. (1993). It’s not factor accumulation: Stylized facts and growth models. World Bank Economic Review 15(2), 177–219.
17. Edwards, S. (1998). Trade policy, growth, and income distribution. American Economic Review, 87(2), 205–210.
18. Feliciano, Z. (2001). Workers and trade liberalization: The impact of trade reforms in Mexico on wages and employment. Industrial and Labor Relations Review, 55(1), 95-115.
19. Goldberg, L. S. (2003). Industry specific exchange rates for the United States. Federal Reserve Bank of New York Working Paper.
20. Gulati, A. & Narayanan, S. (2002). Rice trade liberalization and poverty, MSSD Discussion Paper No. 51. International Food Policy Research Institute
21. Hasan, R. (2001). The impact of trade and labour market regulations on employment and wages: Evidences from developing countries. East-West Center working papers, August, No. 32.
22. Harrison, A. (1995). Openness and growth: A time series, cross-country analysis for developing countries. NBER Working Paper No. 5221, August.
23. Jha, R. (2000). Rising income inequality and poverty reduction: Are they compatible? Oxford: Clarendon Press.
24. Khan, A. R. (2001). Issues in Employment and Poverty. International Labour Oragnisation.
25. Kuznets, S. (1955). Toward a theory of economic growth. In R. Lekachman (ed.), National Policy for Economic Welfare at Homa and Abroad. pp. 12-85 Garden City, NY: Doubleday.
26. Lundberg, M. & Squire, L. (2003). The simultaneous evolution of growth and inequality. Economic Journal, 113(487), 326-344.
27. Matin, K. (1992). Openness and economic performance in sub-Saharan Africa: Evidence from time-series cross country analysis. Working Paper No. 1025, World Bank, November.
28. McCaig, B. (2011). Exporting out of poverty: Provincial poverty in Vietnam and U.S market access. Journal of International Economics, 85(1), 102-113.
29. McCulloch, N. Winters, L. A. & Cirera, X. (2001). Trade liberalization and poverty: A handbook. Centre for Economic Policy Research, Department for International Development, United Kingdom.
30. Mengistae, T & Pattillo, C. (2002). Export orientation and productivity in sub-Saharan Africa. IMF Working paper WP02/89.
31. Michaely, M. (1977). Exports and growth: An empirical investigation. Journal of Dcvclopment Economics, 4(1), 49-53.
32. OECD. (1994). Jobs study: Evidence and explanations. Chapter 3, Paris.
33. Proudman, J., Redding, S. & Bianchi, M. (1997). Is international openness associated with faster economic growth? Bank of England Working Paper No. 63.
34. Ravallion, M. & Datt, G. (2000). When is growth pro-poor? Evidence from the diverse experience. Policy Research Working Paper Series 2263, Development Research Group, World Bank.
35. Ravallion, M. & Chen, S. (2003). Measuring pro-poor growth. Economics Letters, Elsevier, 78(1), 93-99.
36. Ravallion, M. (2001). Growth, poverty and inequality: Looking beyond averages. Development Research Group, World Bank.
37. Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy. 94(October), 1002-1037.
38. Stiglitz, J. (1970). Factor price equalization in a dynamic economy. Journal of Political Economy, 78(3), 456-488.
39. Topalova, P. (2005). Trade liberalization, poverty and inequality: Evidence from Indian Districts. NBE working paper no. 11614.
40. UNCTAD. (2010). Trade and Development Report 2010: Employment, Globalization and Development. United Nations publication. E.10. II . D.3. New York and Geneva.
41. Wagner, J. (2007). Exports and productivity: A survey of the evidence from firm level data. The World Economy, 30(1), 60-82.
42. Winters, L. A., McCulloch, N. & McKay, A. (2004). Trade liberalization and poverty: The evidence so far. Journal of Economic Literature, 42(March), 72-115.
43. Zhou, L., Biswas, B., Bowles, T. & Saunders, P. J. (2011). Impact of globalization on income distribution inequality in 60 Countries, Global Economy Journal, 11(1), 1-16.