Global Trade Reforms and Income Distribution in Developing Countries

This paper examines the effects of trade and domestic agricultural policy reforms on the distribution of incomes in six developing countries: Brazil, China, India, Malawi, Mexico and South Africa. The aggregate results from a global trade model are fed into separate national models. The insights available from alternative model types are evaluated. The distributional impacts of reform are found to be complex and to vary between countries. Given that it is typically impossible to reform (or equally not reform) without hurting some households with lower incomes, the conclusion is that it makes sense to help these households with targeted policies.