Globalization and Poverty in Senegal : A Worst Case Scenario?

There is no consensus about how globalization - trade and foreign investments - affects poverty reduction. Using household survey data, this study contributes to the empirical literature on globalization and poverty by analyzing the household-level implications of increased foreign investments and trade in the horticulture sector in Senegal. In many aspects this represents what many would consider a quot;worst-case scenarioquot;. Stringent rich country standards are imposed on exports and the supply chain is controlled by a single multinational company with extreme levels of supply base consolidation and vertical integration and complete exclusion of smallholder suppliers. We analyze and quantify income and poverty effects under these quot;worst-case conditionsquot; and find significant positive welfare impacts through employment creation and labor market participation