Answer to Question #94565 in Macroeconomics for Valeria

Question

Drawing from country experiences, what is needed in order to carry out successful trade policy reforms? (25)

Answer 1

Policy makers should acknowledge that trade induced poverty are not universal, they are specific to each country and dependent on heterogeneous characteristics of poor households. Thus generalization sounds be discouraged.

Another approach is to recognize that different transmission channels can lead to conflicting signs. Thus, it is important to carefully examine and identify the effectiveness of these channels in a particular country. Such an approach will help policy makers in implementing suitable responses that will ensure that policy reforms are specific to the country's needs in terms of improving its business environment and poverty reduction efforts.