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Trade Liberalization and Poverty Reduction: New Evidence from Indian States

J.Salcedo Cain; Rana Hasan; Devashish Mitra

Title:
Trade Liberalization and Poverty Reduction: New Evidence from Indian States
Author(s):
Cain, J.Salcedo
Hasan, Rana
Mitra, Devashish
Date:
Type:
Working papers
Department:
Program on Indian Economic Policies
Permanent URL:
Series:
Program on Indian Economic Policies Working Papers
Part Number:
2010-3
Publisher:
School of International and Public Affairs, Columbia University
Publisher Location:
New York
Abstract:
As is widely acknowledged, the incidence of poverty in India has declined steadily over the last several decades. What is debated, however, is the pace at which poverty has declined and its relationship with India's economic reforms. In particular, a key concern among policymakers and researchers alike is that trade liberalization undertaken in the early 1990s may have slowed the progress made in reducing poverty. In this paper, we update our previous econometric analysis on the links between trade liberalization and poverty reduction in India. By incorporating measures of poverty based on the 2004-05 consumer expenditure survey carried out by India's National Sample Survey Organisation, we are able to sidestep the controversy-ridden poverty measures based on the 1999-2000 survey. Our new results are in line with the earlier ones in Hasan, Mitra and Ural (2007): States, and regions within states, that were more exposed to trade liberalization on account of their employment structures did not experience slower reduction in poverty; on the contrary, to the extent that we find a statistically significant relationship between trade liberalization and poverty reduction, the evidence points to faster poverty reduction in states and regions experiencing greater increases in exposure to trade. Moreover, this relationship is typically stronger in states with more flexible labor regulations, better quality transportation infrastructure, and more developed financial systems.
Subject(s):
Economics
Item views:
2239
Metadata:
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Suggested Citation:
J.Salcedo Cain, Rana Hasan, Devashish Mitra, 2010, Trade Liberalization and Poverty Reduction: New Evidence from Indian States, Columbia University Academic Commons, http://hdl.handle.net/10022/AC:P:10819.

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