Poverty, inequality and welfare effects of trade liberalization in Côte d'Ivoire: A computable general equilibrium model analysis
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Date
2006-10-01
Authors
Bédia F. Aka
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
This paper attempts to quantify the effects of removing trade taxes and instituting some
necessary fiscal reform on poverty and income distribution in Côte d’Ivoire. It first
analyses income distribution for various homogenous socioeconomic groups using an
absolute poverty line based on the constant basic needs approach. Next it simulates and
analyses in a computable general equilibrium (CGE) model the impact on poverty,
inequality and welfare of the elimination of taxes on agricultural exports and imports
combined with a change in the domestic tax rate. The results show that poverty increases
for all households, but depending on the simulations the situation is diversified among
socioeconomic groups. Liberalizing trade by removing tax on exports leads to an increase
in domestic prices of agricultural and industrial goods, resulting in an increase in the
consumer price index and a decrease in households’ disposable income and thus in their
consumption. Public employees are identified as the most affected by poverty following
trade tax reform
Description
HF 2465.A33 2006
Keywords
Free Trade - Cote dÍvoire - Econometric models , Equilibrium ( Economics) - Mathematical Models , Computable general equilibrium models , Regional integration , , Fiscal policy, , CGE.