South Africa trade liberalization and poverty in a dynamic microsimulation CGE model

dc.contributor.authorMabugu, Ramos
dc.contributor.upauthorChitiga-Mabugu, Margaret
dc.date.accessioned2008-02-06T12:31:05Z
dc.date.available2008-02-06T12:31:05Z
dc.date.issued2007-09
dc.description.abstractSouth Africa has undergone significant trade liberalization since the end of apartheid. Average protection has fallen while openness has increased. However, economic growth has been insufficient to make inroads into the high unemployment levels. Poverty levels have also risen. The country’s experience presents an interesting challenge for many economists that argue that trade liberalization is pro-poor and pro-growth. This study investigates the short and long term effects of trade liberalization using a dynamic microsimulation computable general equilibrium approach. Trade liberalization has been simulated by a complete removal of all tariffs on imported goods and services, and by a combination of tariff removal and an increase of total factor productivity. The main findings are that a complete tariff removal on imports has negative welfare and poverty reduction impacts in the short run which turns positive in the long term due to the accumulation effects. When the tariff removal simulation is combined with an increase of total factor productivity, the short and long run effects are both positive in terms of welfare and poverty reduction. The mining sector (highest export orientation) is the biggest winner from the reforms while the textiles sector (highest initial tariff rate) is the biggest loser. African and Colored households gain the most in terms of welfare and numbers being pulled out of absolute poverty by trade liberalization.en
dc.format.extent1147009 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.citationMabugu, R & Chitiga, M 2007, 'South Africa trade liberalization and poverty in a dynamic microsimulation CGE model', University of Pretoria, Department of Economics, Working paper series, no. 2007-18. [http://web.up.ac.za/default.asp?ipkCategoryID=736&sub=1&parentid=677&subid=729&ipklookid=3]en
dc.identifier.urihttp://hdl.handle.net/2263/4376
dc.language.isoenen
dc.publisherUniversity of Pretoria, Department of Economicsen
dc.relation.ispartofseriesWorking Paper (University of Pretoria, Department of Economics)en
dc.relation.ispartofseries2007-18en
dc.rightsUniversity of Pretoria, Department of Economicsen
dc.subjectSequential dynamic CGEen
dc.subjectMicrosimulationen
dc.subjectTrade liberalizationen
dc.subjectTotal factor productivityen
dc.subjectPoverty, welfareen
dc.subjectGrowthen
dc.subjectSouth Africaen
dc.subject.lcshFree trade -- South Africa -- Mathematical modelsen
dc.subject.lcshPoverty -- South Africaen
dc.titleSouth Africa trade liberalization and poverty in a dynamic microsimulation CGE modelen
dc.typeWorking Paperen

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