Theoretical Approaches to the Analysis of Trade and Poverty and a Review of Related Literature on South Africa

Abstract

This paper considers a variety of theoretical approaches to the analysis of trade and poverty, from conventional trade theory to a livelihoods approach towards the poverty impact of trade reform. The conclusion is reached that further development and integration of alternative frameworks that move beyond traditional trade theory is important for the evolution of pro-poor trade policy reform. The paper uses the methodological framework put forward by Winters (2000a Winters, L A (2000a): “Trade and Poverty: Is There a Connection?” in Ben-David, D, Nordstrom, H and Winters, L A, Trade, Income Disparity and Poverty, World Trade Organisation (WTO) Special Studies No 5, WTO, Geneva: 43-69. [Google Scholar],b Winters, L A (2000b): “Trade Liberalisation and Poverty”, PRUS Working Paper No 7, Poverty Research Unit At Sussex, University of Sussex, Brighton. [Google Scholar]) and McCulloch et al. (2001) Mcculloch, N, Winters, L A and Cirera, X (2001): Trade Liberalization and Poverty: a Handbook. CEPR and DFID, London. [Google Scholar] to review existing research, prior to the SALDRU Trade and Poverty Project, relevant to the relationship between trade and poverty in South Africa. Important avenues for future research are identified. In concluding, the paper comments on appropriate policies that may be inferred from the theoretical discussion and South African research surveyed that could accompany trade reform to ameliorate potential adverse poverty outcomes.

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