Trade Inclusivity

The K4DD Rapid Evidence Review begins with discussing a popular theoretical trade impact model (the Heckscher-Ohlin-Samuelson) model which suggests that trade openness has an impact on microeconomic factors, i.e., brings about changes in the consumption, production and income patterns at the household level.

At this level, the model suggests that trade openness can increase the price households sell goods at, reduce the consumption price of households, and increase the income of households, thereby, reducing poverty and inequality.

At the macroeconomic level, literature suggests that growth and productivity are required for reductions in poverty. Governments play an important role in collecting and using taxes from trade agreements, a change in tax revenue can affect the decisions made at the institutional/state level. In practice, however, the impact of trade and trade barriers and the consequent impact on trade inclusive measures vary significantly across different regions and groups,