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Chapter 13 in (2005)
BibTeX
@MISC{Cororaton05chapter13,
author = {Caesar B Cororaton and John Cockburn and Erwin Corong and Thomas W. Hertel and L. Alan and Winters World Bank},
title = {Chapter 13 in},
year = {2005}
}
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Abstract
Since the early 1980s, the Philippines has undertaken substantial trade reform. The current Doha round of WTO negotiations is now likely to bring further reform and shocks to world import prices and export demand. The impact of all these developments on the poor is not very clear and is the subject of very intense debate. A detailed economy-wide CGE model is used to run a series of policy experiments. Poverty is found to increase slightly with the implementation of the Doha scenario. These effects are focused primarily among rural households in the wake of falling world prices and demand for Philippines agricultural exports. The impacts of full liberalization – involving free world trade and complete domestic liberalization – are found to depend strongly on the mechanism the government adopts to offset forgone tariff revenue. If an indirect tax is used, the incidence of poverty falls marginally, but the depth (poverty gap) and severity (squared poverty gap) increase substantially. If, instead, an income tax is used, all measures of poverty increase. In both cases, full liberalization favors urban households, as exports, which are primarily non-agricultural, expand. In separate simulations, we discover that free world trade is poverty reducing and favors
Keyphrases
free world trade philippine agricultural export detailed economy-wide cge model forgone tariff revenue policy experiment poverty increase world price complete domestic liberalization rural household full liberalization wto negotiation intense debate income tax export demand poverty gap world import price separate simulation current doha round indirect tax poverty fall doha scenario full liberalization favor urban household substantial trade reform
