This is a shortened and merged version of separate papers prepared by the authors for the EPIAM workshop of October 2003. The views expressed here are entirely those of the authors and should not be taken as representing those of any institution mentioned above.
Analysing Macro-Poverty Linkages of External Liberalisation: Gaps, Achievements and Alternatives
Article first published online: 19 APR 2005
Development Policy Review
Special Issue: Analysing macro poverty linkages
Volume 23, Issue 3, pages 285–298, May 2005
How to Cite
Gunter, B. G., Taylor, L. and Yeldan, E. (2005), Analysing Macro-Poverty Linkages of External Liberalisation: Gaps, Achievements and Alternatives. Development Policy Review, 23: 285–298. doi: 10.1111/j.1467-7679.2005.00287.x
- Issue published online: 19 APR 2005
- Article first published online: 19 APR 2005
CGE modelling has dominated analysis of the impact of external liberalisation on poverty. This article provides a structuralist critique of standard neo-classical CGE models. It highlights five sets of gaps and partial achievements in the modelling of issues affecting the poverty impact of macroeconomic policies: duality and structural rigidities; efficiency gains and quota rents; the investment and savings specification; the nature of public expenditures; and the modelling of financial fragility, risk premia and issues of credibility. It outlines a model that makes it possible to analyse more plausible stories about the impact of both current and capital account liberalisation and questions the realism of existing approaches to ex-ante poverty impact assessment.