2005年-世界发展银行全球_Poverty_Effects_of_Russias_WTO_Accession___Modeling_Real_Households_and_Endogenous_Productivity_Effects_65页_710kb

Summary of "Poverty Effects of Russia's WTO Accession: modeling 'real' households and endogenous productivity effects"

Core Content

This paper analyzes the impact of Russia's accession to the World Trade Organization (WTO) on poverty and income distribution using a computable general equilibrium (CGE) model with 55,000 "real" households from the Russian Household Budget Survey (HBS). The study emphasizes the importance of incorporating foreign direct investment (FDI) and Dixit-Stiglitz endogenous productivity effects in trade and poverty analysis.

Main Points

• Model Innovation: The paper introduces a CGE model that integrates all 55,000 households from the HBS, making it one of the most detailed micro-simulation models of its kind.

• Methodology: A new algorithm is developed to solve the large-scale model efficiently, which significantly improves upon the Negishi algorithm for models with many agents.

• Impact of WTO Accession:

  • In the medium term, virtually all households benefit from WTO accession, with 99.9% of households experiencing income increases ranging from 2% to 25%.
  • The average household gain is 7.3% of Russian consumption (or 3.4% of GDP).
  • The most significant source of gains is the liberalization of FDI barriers in business services, contributing 5.3% of consumption.
  • Tariff reductions and improved market access also contribute to gains, but to a lesser extent (1.3% and 0.7% of consumption respectively).

• Modeling Productivity Effects:

  • Dixit-Stiglitz variety effects are included in both goods and services sectors, leading to endogenous productivity gains.
  • These effects are crucial for accurately capturing the welfare impacts of WTO accession, especially for poorer households.
  • The CRTS version of the model, which excludes these effects, results in lower gains (1.2% of consumption) and 7% of households experiencing losses.

• Distributional Effects:

  • Gains are relatively evenly distributed across income groups, but poorer households gain more due to a greater increase in unskilled labor wages compared to capital returns.
  • Rural households gain less than urban households, as they are less endowed with skilled labor.

• Sequential vs Integrated Approach:

  • The sequential approach (top-down) is less accurate in capturing the true distributional effects due to ignoring feedback effects and inconsistent data reconciliation.
  • However, approximation errors in the sequential approach are relatively small when data are reconciled.
  • The integrated model provides a more accurate assessment of the progressivity of the policy change.

• Transition Costs:

  • Short-term losses are possible for some households due to transition costs such as unemployment and retraining expenses.
  • Safety nets are crucial for the poorest members of society during the transition period.

Key Information

• Model Structure:

  • The model includes 35 sectors categorized into competitive, imperfectly competitive goods, and imperfectly competitive services.
  • Primary factors of production include capital, skilled labor, and unskilled labor.

• Data Sources:

  • Russian Household Budget Survey (HBS): Provides detailed household consumption and demographic data.
  • Russian Longitudinal Monitoring Survey (RLMS): Offers information on income sources, though not representative at the regional level.
  • Small Area Estimation (SAE) and Matching techniques are used to combine HBS and RLMS data for comprehensive analysis.

• Policy Implications:

  • The liberalization of FDI in services is more impactful than tariff reductions.
  • Data reconciliation is essential for accurate results.
  • Government safety nets are necessary to support transition costs for vulnerable households.

Conclusion

The study concludes that Russia's WTO accession leads to significant and broad-based income gains in the medium term, with poor households benefiting more than wealthier ones. However, short-term transition costs may affect some households, emphasizing the need for social safety nets. The integration of "real" households and endogenous productivity effects in the model provides a more accurate and nuanced understanding of the distributional impacts of trade liberalization, particularly in the context of FDI liberalization and product variety.