This note provides two analytical frameworks for understanding the role of trade
in promoting inclusive growth in developing economies. A working definition of
inclusive growth focuses on long-term, sustained growth associated with
productivity growth and employment opportunities for broad portions of
households and firms within countries.
International integration can promote
inclusive growth when workers and firms are able to adjust to enter into growing
economic activities and adopt technologies availed through international trade.
The frameworks described in this note build on simple household and firm choice
models, which require only basic knowledge of development economics.
The
discussion highlights how these frameworks can help analysts focus on research
and policy questions related to the impacts of international trade across the
distribution of households and firms within countries. It also discusses
publicly available data sets that can be used to explore some aspects of
inclusive growth. In addition, the note highlights important caveats that need
to be acknowledged by analysts and discusses avenues for future research, which
needs to be part and parcel of the inclusive growth agenda
World Bank. Author:Lederman,Daniel.Document Date: 2011/11/01.Document Type: Policy Research Working Paper.Report Number: WPS5886.Volume No: 1 of 1
