GATT/WTO membership–poverty nexus: An unconditional quantile regression approach

Abstract

AbstractThis paper uses unconditional quantile regression methods to evaluate the incidence of GATT/WTO membership on poverty in countries with different poverty rates. My results suggest that GATT/WTO membership increases significantly poverty across the entire unconditional distribution of poverty. Countries with the highest poverty rates incur larger poverty increases after joining GATT/WTO than countries with lower poverty rates. However, the results point out heterogeneity among countries depending on the reforms carried upon GATT/WTO membership. The results indicate that countries that conducted extensive policy reforms and were not subject to Article XXVI 5(c) are associated with poverty reduction. Also, by splitting the sample into groups of countries that have and do not have a comparative advantage in agriculture, I find that countries with lower poverty rates that are net exporters of agricultural products experience poverty reduction, whereas poverty increases in net importing countries across poverty quantiles. These results are robust across different unconditional quantile regression methods and to the selection bias.