Journal of Political Science and Development
International Journal of Political Science and Development
Vol. 2(5), pp. 90 –96, May, 2014
Trade liberalization and poverty reduction in Africa: computable general equilibrium models approach. literature review
1Rafael de Arce, 2Saúl de Vicente, 3Ramón Mahía and 4Eva Medina
1Applied Economics Department UAM, 28049, Madrid, Spain.
2Applied Economics Department UAM, 28049, Madrid, Spain. Corresponding author’s email: email@example.com. Telephone: 0034 914972852, Fax number: 0034 914973422.
3Applied Economics Department UAM, 28049, Madrid, Spain.
4Applied Economics Department UAM, 28049, Madrid, Spain.
Accepted 22 May 2014
The link between
trade liberalization and poverty reduction has played a crucial role
on economic policy in developing and least developed countries,
particularly in sub-Saharan Africa. Academic research shows a
remarkable lack of consensus and no clear effects in the direction
of these linkages. This study presents an overview of the impact of
trade liberalization on poverty in Sub-Saharan Africa within a
general equilibrium framework. In order to do that, the links
between trade liberalization and poverty are firstly summarized,
reviewing the existent literature. After briefly describing the
basic and extended structure of computable general equilibrium
models, the advantages and drawbacks of using this methodology to
analyze the relation between these two variables is shown, including
the main findings from previous literature applied to the particular
case of Sub-Saharan countries. Most of the studies conclude that,
while trade liberalization has positive effects on poverty reduction
in the long run, it should be accompanied by structural reforms,
industrial and redistribution policies in order to minimize the
expected negative effects in the short-term.