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Global income distribution and poverty in the absence of agricultural distortions, Volume 1
 
Author:Bussolo, Maurizio; De Hoyos, Rafael; Medvedev, Denis; Country:World;
Date Stored:2009/03/02Document Date:2009/03/01
Document Type:Policy Research Working PaperSubTopics:Achieving Shared Growth; Economic Theory & Research; Rural Poverty Reduction; Inequality; Population Policies
Language:EnglishRegion:The World Region
Report Number:WPS4849Collection Title:Policy Research working paper ; no. WPS 4849
Volume No:1  

Summary: This paper assesses the potential impacts of the removal of agriculture trade distortions using a newly developed dataset and methodological approach for evaluating the global poverty and inequality effects of policy reforms. It finds that liberalization of agriculture and food could increase global extreme poverty (US$1 a day) by 0.2 percent and lower moderate poverty (US$2 a day) by 0.3 percent. Beneath these small aggregate changes, most countries witness a substantial reduction in poverty while South Asia-where half of the world's poor reside-experiences an increase in extreme poverty incidence due to high rates of protection afforded to unskilled-intensive agricultural sectors. The distributional changes are likely to be mild, but exhibit a strong regional pattern. Inequality is likely to fall in regions such as Latin America, which are characterized by high initial inequality, and rise in regions like South Asia, characterized by low initial inequality.

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