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Trade, tariffs, growth and poverty

Ackah, Charles; Leyaro, Vincent; Morrissey, Oliver


Charles Ackah

Vincent Leyaro


Ricardo Lopez

Kishor Sharma


Increased globalization and widespread trade liberalization in developing countries since the 1980s has inspired considerable debate on the impact of globalization in general, and trade liberalization in particular, on growth, incomes and poverty. This chapter provides an overview of the issues and evidence in a selective literature review. After considering why trade is important and arguments for and against protection in the remainder of this section, we focus on three issues. Section 2.2 provides an overview of the literature on the relationship between trade and growth, noting that whilst a positive correlation is well established it is difficult to assert ‘causality’ (whether trade drives growth or growth leads to increased trade). Section 2.3 addresses the related issue of how trade liberalization (trade policy reforms reducing barriers to trade, especially on imports) affects growth, for which the evidence is less clear. Section 2.4 considers the broader issue of how trade relates to poverty, especially in low-income countries (LICs) or sub-Saharan Africa (SSA). Section 2.5 provides a very brief conclusion. Economists disagree about many things, but one proposition that attracts widespread agreement is that high barriers to trade damage the economy, especially if there is considerable variation across sectors and products in the extent of barriers (as this induces prices distortions that generate inefficiency).


Ackah, C., Leyaro, V., & Morrissey, O. (2015). Trade, tariffs, growth and poverty. In R. Lopez, O. Morrissey, & K. Sharma (Eds.), Handbook on trade and developmentEdward Elgar Publishing. doi:10.4337/9781781005316.00007

Book Type Book Chapter
Publication Date May 29, 2015
Deposit Date Sep 10, 2015
Publicly Available Date Sep 10, 2015
Publisher Edward Elgar Publishing
Peer Reviewed Peer Reviewed
Book Title Handbook on trade and development
ISBN 9781781005309
Public URL
Publisher URL
Copyright Statement Copyright information regarding this work can be found at the following address:
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Trade & Development Handbook Chapter 2 (pdf file).pdf (353 Kb)

Copyright Statement
Copyright information regarding this work can be found at the following address:

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