International trade and poverty: Does international trade contribute to reduce poverty in developing countries?

Abstract

Literatures (or empirical studies) suggest that international trade has a positive effect on countries, it increases consumption possibilities and contributes to reduce poverty. This work focuses on the impact of international trade on poverty in developing countries. It appeared that, under trade liberalization, the overall effect within a country is positive, however, some win, and others lose within the country. Therefore, increasing openness to international trade contributes to reduce poverty in developing countries. But the findings show that the linkages are not automatic (or direct), the impact of international trade on poverty is context-specific and many other factors need to be considered. Implementing complementary policies is required to maximize trade’s potential impact in reduction of poverty.