Working Paper

Trade Liberalisation, Poverty and Livelihoods: Understanding the Linkages

Published on 1 January 2002

The main purpose of this paper is to review and assess key analytical approaches that are used to understand the linkages between trade, poverty and livelihoods, with a view to better understanding their linkages in the context of sub-Saharan Africa (SSA).

We explore two main perspectives: mainstream economics takes an aggregate approach, measures poverty primarily on the basis of income, and is generally positive about the impacts of trade liberalisation on poverty. A wider socio-economic, livelihoods perspective focuses on micro-level complexity, employs multi-dimensional concepts of poverty and is less positive about the impact of trade liberalisation on poverty. The two perspectives occupy different ‘domains’ and are not easily integrated.

In the context of SSA it is difficult to isolate the effects of trade liberalisation, and its effects (income and non-income related) are likely to be influenced by a range of policies. A broad approach is of particular importance for SSA where the livelihoods of the majority are still largely dependent on small-scale agriculture and the natural resource base, investment is low, markets are weak and segmented and institutions are fragile but are increasingly exposed to international market forces through trade liberalisation (in both rural and urban areas).

Integrating social and economic, market and non-market factors into an analysis of trade and poverty is an important challenge facing development analysts and practitioners. From an analytical perspective, we examine three separate approaches that have begun to do this – value chain, gender and sustainable development perspectives. Each of these has been developed within its own sphere of interest, but each provides insights into the more complex interaction between trade and poverty at a macro, meso and micro level.

Ongoing and further work can help to develop each of these approaches, and give more consideration of the overlaps between them, and how they can contribute to a more comprehensive understanding of trade and poverty in SSA.

Publication details

published by
Kanji, N. and Barrientos, S.
IDS Working Paper, issue 159
1 85864 424 0


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