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The Social Impacts of Trade Liberalisation: How can childhood poverty be reduced?

Briefing/policy paper

Written by Nicola Jones, Paola Pereznieto

Briefing/policy paper

Debates on the consequences of globalisation mostly ignore issues related to children – particularly their wellbeing, rights and poverty experiences. However, globalisation and trade liberalisation are likely to have a major impact on the lives of poor children and their families. Given that children comprise a significant proportion of the population in developing countries, that impacts on children’s welfare and poverty status tend to have a long-term effect on their development over their life-course and potentially generate intergenerational transfers of poverty, any discussion of the social impacts of trade must be approached from a child-sensitive perspective.

Yet trade liberalisation does not uniformly affect all segments of a population and its effects on poverty reduction are not always experienced in the short term. Developing country governments must pay attention to these differential impacts in order to mitigate the inequities that trade liberalisation is likely to exacerbate in developing countries. Policy impacts on children need to be traced from the changes they generate on macroeconomic variables (from consumer prices to individual household livelihoods) and the complexity of differential intra-household effects. Such analysis is important if policies are to compensate for any negative impacts and to harness the benefits of liberalisation to improve the conditions of children living in poverty.

The impact of trade liberalisation on children is likely to vary between:

  • girls and boys
  • young children and adolescents
  • children in rural and urban localities
  • children in in rich and poor households
  • children whose households are involved in particular economic sectors.

Additionally, there are likely to be important differences in the impact of trade liberalisation between developing countries, according to their level of market integration, relative terms of trade, bargaining power in the world economy, the composition of their economies and the degree of comparative advantage in different sectors.

This briefing paper begins by examining the general ways in which trade liberalisation can affect children. It then discusses findings from Young Livesi (YL) quantitative and qualitative research in Peru and Ethiopia in order to demonstrate these impacts before discussing policy implications.

Paola Pereznieto and Nicola Jones