the development trinity: how regional integra7on impacts
TRANSCRIPT
TheDevelopmentTrinity:HowRegionalIntegra7onImpactsGrowth,InequalityandPoverty
MariaV.Sokolova(UNCTAD)(jointwithAmeliaSantos-Paulino(UNCTAD)andAlisaDiCaprio(R3))
4October2018Rome,Italy
MoOvaOon
• IntheworldofmulOlateraltradeliberalisaOon,regionaltradeintegraOonistakingover– EveryWTOmemberisapartnerofatleast1regionaltradeagreement(RTA)
– IsregionalisaOonunderminingorimprovingthedevelopment?
• Docountriesreapthebenefitsinthesameway?
DevelopmentofregionalrelaOonshipsintheworld
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012
World,RTApairscount,w/oAsia(l.a.) Asia,countRTApairs(l.a.) GDPworld,2000=1 Asia,GDP Trflows,world Trflows,Asia
South-South,South-North
.51
1.5
22.
5RT
A re
latio
nshi
ps (1
990=
1)
1980 1990 2000 2010year
SS SN NN
Literaturereview(1/2)• RTAsarenolongerabouttrade
– Viner(1950)tradeliberalisaOon;– TTIP/TPP/ASEAN/USA-Can-Mex,etcincludeamenufromecommerce,
womenempowerment,dataprotecOon,humanrights,sustainabilityconsideraOons(latestisRodrik2018thatclaimsthattradecreaOonanddiversionisnotsufficienteffectofRTAs)
• WelfareimpactsofRTAsareambiguous– Eventrade-induced(Baier&Bergstrand,2007,2017;Daietal.,2014)– Tradeandpriceindexes(WintersandChang,2002),economicgrowth
(HurandPark,2012)isbelievedtobeoverallaposiOverelaOonship– WelfaregainsofintegraOondependoninput(Arokolakis,CosOnotand
Rodriguez-Clare,2013)
Literaturereview(2/2)• EUintroducedsustainabilityconsideraOons(SIA)intoRTAnegoOaOons
• InequalitywithincountriesisrisingatthesameOmeastrade(e.g.GoldbergandPavcnik,2007)
• • Tradecanincreaseabsolutepoverty(e.g.Changetal.,2009)ordecreaseit
(BorrazandFerrés,2012)
• Etc,etc,etc…
RTAsheterogeneity
InternalRegionalisaOon
• Ashareofregionaltradeinoveralltrade• Reflectssovereigncountry’sparOcipaOoninRTAs
InternalRegionalizaOonandGrowth
ALB
ARE
AUSAUT
AZE
BEL
BGR
BHR
BIH
BLR
BMUBRN
CANCHE
CYPCZEDEUDJI
DNKDZAEGY
ESP
EST
FINFJI FRA
FSM GBRGRC
HKG HRVHUNIRLIRN IRQ
ISLISR ITA
JOR
JPN
KAZ
KOR
KWT
LBN
LBY
LTU
LUX
LVA
MAC
MARMKD
MLT NLD
NORNZL
OMN
POL
PRTQAT
RUS
SAUSGP
SVK
SVNSWE
TKM
TON
TUN
TUR
TUV
UKR
USAWSM
YEM
AGO
BDI
BEN
BFABWA
CAFCIV
CMR CODCOG
COM
CPV
ERI
ETH
GAB
GHA
GINGMBGNB
GNQ
KENLBR
LSO
MDG
MLI MOZ
MRT
MUS
MWI
NAM
NER
NGARWASDN
SEN
SLE
SWZSYC
TCD
TGO
TZAUGA
ZAF
ZMB
ZWE
ARM
BGDBTN
CHN
GEO
IDN
IND
KGZ
KHM
KIR
LAOLKA MDA
MHL
MNG
MYSNPLPAK
PHL
PLW
PNG
SLB
THA
TJKUZB VNM
VUTATGBHS
BLZBOLBRA
BRB
CHL
COL CRICUB
DMA
DOM
ECUGRDGTM
GUYHND
HTIJAM
KNALCA
MEXNIC
PANPER
PRY SLV
SURTTO
URYVCT
VEN
-.50
.51
1.5
2G
DPpc
gro
wth
1995
- 20
15
-.5 0 .5 1Reg1, change 1995 - 2015
Other countries Sub-Saharan Africa Developing Asia Latin America
InternalregionalizaOonandinequality
AUSAUT
BGR
BLR
CAN
CHE
CZEDEU
DNK
ESP
FIN
FRA
GBRGRC HUN
IRLIRN
ISR ITA
KAZ
KORLTU
LVA
NLDNOR
NZL
POL
PRT
RUS
SVK
SWE
TUR
UKR
USA
ETH
GIN
MDGMRT
MUS
NERSEN
TZA
UGAARM
CHN
IDN
IND
KGZ
LAO
LKA
MNG
MYS
PHL
THA
BOLBRA
CHLCOL
CRI
DOM
ECU
HND
MEX
NIC
PAN PER
PRY
SLV
URY
VEN
-20
-10
010
Ineq
uality
cha
nge
1995
-201
5
-.4 -.2 0 .2 .4 .6Reg1, change 1995-2015
InternalregionalizaOonandpoverty
ALBBGRBLRCZE
ESTHRVHUNIRNKAZ
LTULVAPOLRUSSVK SVNTUR UKR
GIN
NER
SEN
TZA
UGA
ZAF
ARM
GEO
IND
KGZ
KHM
LAO
LKA
MDAMNG
PHL
THA
VNM
BOL
BRA
CHL
COLCRI
DOM
ECU
GTM
HNDMEX
PAN
PERPRY
SLV
URY-3
0-2
0-1
00
Chan
ge in
%%
of p
op.g
ap b
elow
(1.9
0USD
/day
) 199
5-20
15
-.5 0 .5 1Reg1, change 1995-2015
Poverty in 1995, or in any of the years 1990-1995 due to data availability
ExternalRegionalisaOon
• “Noodles”and“spaghem”ofRTAsexist• AcountryisexposedtoregionalizaOonpolicyofitstrading
partners• Evenifyouarenot“implemenOng”thedecision,youare
affected
ExternalregionalisaOonandGrowth
ALB
ARE
AUSAUT
AZE
BEL
BGR
BHR
BIH
BLR
BMUBRN
CANCHE
CYPCZEDEUDJIDNK
DZAEGYESP
EST
FINFJIFRA
FSMGBRGRC
HKGHRVHUNIRLIRN IRQ
ISLISRITA
JOR
JPN
KAZ
KOR
KWT
LBN
LBY
LTU
LUX
LVA
MAC
MARMKD
MLT
MNE
NLD
NORNZL
OMN
POL
PRTQAT
RUS
SAUSGP
SRBSVK
SVNSWE
TKM
TON
TUN
TUR
TUV
UKR
USAWSM
YEM
AGO
BDI
BEN
BFA BWA
CAFCIV
CMRCODCOG
COM
CPV
ERI
ETH
GAB
GHA
GIN GMBGNB
GNQ
KENLBR
LSO
MDG
MLIMOZ
MRT
MUS
MWI
NAM
NER
NGARWASDN
SEN
SLE
SWZSYC
TCD
TGO
TZAUGA
ZAF
ZMB
ZWE
ARM
BGDBTN
CHN
GEO
IDN
IND
KGZ
KHM
KIR
LAOLKAMDA
MHL
MNG
MYSNPLPAK
PHL
PLW
PNG
SLB
THA
TJK UZB VNM
VUTATGBHS
BLZBOLBRA
BRB
CHL
COLCRICUB
DMA
DOM
ECUGRDGTM
GUYHND
HTIJAM
KNALCA
MEXNIC
PANPER
PRY SLV
SURTTO
URY VCT
VEN
-.50
.51
1.5
2G
DPpc
gro
wth
1995
- 20
15
-.2 0 .2 .4 .6 .8Reg2, change 1995 - 2015
Other countries Sub-Saharan Africa Developing Asia Latin America
ExternalregionalisaOonandinequality
AUSAUT
BGR
BLR
CAN
CHE
CZEDEUDNK
ESPESTFIN
FRA
GBRGRCHUN
IRLIRN
ISRITA
KAZ
KORLTU
LVA
MKD
NLDNOR
NZL
POL
PRT
RUS
SVK
SVN
SWE
TUR
UKR
USA
ETH
GIN
MDGMRT
MUS
NERSEN
TZA
UGAARM
CHN
IDN
IND
KGZ
KHM
LAO
LKA
MDA
MNG
MYS
PHL
THA
VNM
BOLBRA
CHL COL
CRI
DOM
ECU
HND
MEX
NIC
PANPER
PRY
SLV
URY
VEN
-20
-10
010
Ineq
uality
cha
nge
1995
-201
5
-.2 0 .2 .4 .6Reg1, change 1995-2015
ExternalregionalisaOonandpoverty
ALB BGRBLRCZE
EST HRVHUNIRNKAZ
LTULVAPOLRUSSVKSVNTURUKR
GIN
NER
SEN
TZA
UGA
ZAF
ARM
GEO
IND
KGZ
KHM
LAO
LKA
MDAMNG
PHL
THA
VNM
BOL
BRA
CHL
COLCRI
DOM
ECU
GTM
HNDMEX
PAN
PERPRY
SLV
URY-3
0-2
0-1
00
Chan
ge in
%%
of p
op.g
ap b
elow
(1.9
0USD
/day
) 199
5-20
15
-.2 0 .2 .4 .6 .8Reg2, change 1995-2015
Poverty in 1991-1995
Empiricalstrategy(1of3)
• Usedummiesforexploringnon-lineareffectofregionalisaOon• Groups:
– LDCs– Developmentclusters(LaOnAmericaandCarribean,Sub-SaharanAfrica,
developingAsia)– Incomegroups(LowIncomeCountries,LowerMiddleIncome)
• OLS/GMMon5-yearaverages• Data1990-2015,coveringallcountries
InternalregionalizaOonandgrowth
Overallresults
ThebenefitsofregionalintegraOonareunevenandnon-linear,e.g.:• DevelopingAsiais
gainingthemost• LaOnAmericabenefits
mostfrominternalregionalisaOon
• GainsforSub-SaharanAfricaaredubious
• ResultissourcedfromLowMiddleIncomeCountries
Results
• RegionalintegraOonmaoersas– Decisionofasovereigncountry(Reg1)– Asexposurethroughtradingpartners(Reg2)
• RegionalintegraOon(throughRTAs)canimprovethedevelopmentpathofacountry
• Theeffectisnon-linear,itdependsonspecificdesigninthegeographicarea
Takeaway
• MulOlateraltraderulesexist,andtheyarenotenoughfordevelopment
• RegionalisaOoncanimprovethedevelopmentresultsoftradeliberalisaOon
• Butithastobe“wellsuited”forcertaincontexts