By Paolo Giordano
Knowing the advanced kin among exchange integration and poverty relief is now a concern for Latin American policymakers. The chapters of this ebook, penned by way of eminent authors with a long-standing list within the box, signify the present nation of data approximately alternate and poverty and supply contrasting issues of view approximately no matter if freer exchange can decrease poverty in Latin the United States. one of many major classes extracted from the booklet is that preexisting regulations and socioeconomc stipulations play a key position in choosing how alternate integration impacts poverty. simply because transmission channels are complicated and hugely contextualized, policymakers are instructed to undertake complementary guidelines adapted to their international locations' conditions so as to verify an equitable distribution of the profits from exchange.
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Additional info for Trade and Poverty in Latin America
Moreover, even if domestic firms can produce efficiently, they must comply with onerous quality and health standards that private distributors and foreign governments impose. Growing reluctance among economists to assert inevitable net benefits of trade integration reflects appreciation of this complexity. The field is beginning to move toward new methodologies, such as in-depth case studies, to better understand what is happening at the sector, firm, and household levels. Those who have led the critique of the Washington Consensus also appear to be more receptive to interdisciplinary approaches to the production of new research.
Social protection and adjustment assistance. There is little detailed information about the impact of adjustment assistance and social-protection mechanisms in cushioning trade impacts. Yet a central hypothesis is that trade liberalization can help the poor if compensatory measures are in place. Many countries might not have the resources to set these up. In others, public expenditures are regressive. There is a great need for detailed and up-to-date case studies of existing programs and socialprotection systems (their design and implementation details, including financial arrangements and sustainability).
But as Attanasio and others (2004) show, the skill premium alone cannot fully explain the observed increase in wage inequality in Colombia. What happens to trade-policy-induced industry wage premiums and trade union premiums may also be important. Using two large data sets on wage inequality across countries over the 1980s and 1990s, one from the Occupational Wages Around the World database and the other from the University of Texas Inequality Project, Milanovic (2005) finds that tariff reduction is associated with a rise in interindustry wage inequality (the industry premium) in developing countries (strictly, countries with lower than $9,000 PPP per capita income at 1995 prices), and somewhat more weakly with interoccupational wage inequality (the skill premium) in those countries.