International Journal of Political Science and Development

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International Journal of Political Science and Development

Vol. 2(5), pp. 90 96, May, 2014

DOI: 10.14662/IJPSD2014.023

 ISSN: 2360-784X


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: saul.devicente@uam.es 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.

Keywords: Sub-Saharan Africa, Poverty Reduction, Trade Liberalization, General Equilibrium Models
JEL-Codes: F63, F47, O55, C68







Current Issue: May 2014


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