Making Trade Policy Work for the Poor: Shifting From Dogma to Detail

Abstract

We review the relationship between trade and poverty in less developed countries, surveying both relevant economic theory and empirical evidence. We conclude that, while there certainly are circumstances under which greater trade openness can lead to poverty reduction, these circumstances do not always obtain. Trade liberalization will only be an effective instrument of poverty reduction under specific structural conditions. There may be more direct and effective means of attaining anti-poverty objectives.