Trade Policy and Poverty in Latin America

Chapter I. Trade Policy and Poverty in Latin America

Waldo Mendoza Bellido y Liu Mendoza Pérez 

Introduction

Poverty reduction is a challenge for Latin American countries. Despite the constant efforts of these countries to reduce the poverty rate, currently about 34% of the inhabitants of Latin America and the Caribbean are poor. Moreover, Latin America is one of the most unequal regions in the world.

As part of a strategy of economic expansion, the region has embarked on greater trade openness in recent years. As Behrman et al. (2001) show, during the past decade almost the entire region embarked on a process of trade liberalization. In the Dominican Republic and Peru trade liberalization was particularly intense; however, this process was significantly less intense in Nicaragua and Bolivia.

How has trade policy affected poverty? That is the question this article attempts to answer.