Trade, Poverty and Adjustments

Adjustment Costs and Adjustment Impacts of Trade Policy 
This is an ongoing research project of the Trade and Research Departments of the World Bank. The overall aim of the project is to document the costs of adjustment to trade policy and to understand how this adjustment takes place in developing countries.

Synthetic Notes 
The immediate goal for this project is to generate a series of Short Synthetic Notes that will be published in a World Bank volume in the summer of 2009. The main purposes of the Notes are: (i) to pull together what we know about adjustment to trade shocks (the state of current research); and (ii) based on this, identify where additional research could best focus on (i.e., help the World Bank – and the broader research and donor community – identify where resources could best be allocated). The project is being supported by the UK Department for International Development.

 Authors & Notes:

Adjustment Costs 

• Labor I: Davidson and Matusz 
• Labor II: Artuc and McLaren 
• Labor & Capital: Casacuberta and Gandelman 
• Supply Responses in Agriculture: de Melo 
• Sunk Costs in Agriculture: Cadot, Dutoit and Olarreaga
  

Adjustment Impacts

• Labor Reallocation: Muendler 
• Adjustments in the Manufacturing Sector: Hanson 
• OffShoring: McMillan 
• Labor Income Risk: Pravin Krishan 
• Child Labor and Schooling: Edmonds 
• Migration: Hanson 
• Preference Erosion (MFA): Harrigan 
• FDI: Javorcik 
• Governance: Nelson 
• Adjustment to Foreign Trade Policy: Bown
  

Factors that Affect Adjustment 

• Transport Costs: Hummels 
• The Duration of Trade and Supplier Search: Besedes and Prusa 
• Export Costs: Tybout 
• Penetration Costs: Arkolakis and Timoshenko 
• Distortions: Kala Krishna 
• Credit: Manova 
• Standards: Swinnen 
  

Adjustment Programs 

• Trade Adjustment Assistance: Richardson 
•  Agriculture Compensation in the EU: Swinnen 

Last updated on Dec 3, 2009