Paper Summary:

This paper examines the article, "Trade and Poverty in the Poor Countries," written by Jagdish Bhagwati and T.N. Srinivasan. The paper discusses the debate in the article, which revolves around the relationship between growth and poverty in the context of international trade. The theoretical issues and the empirical evidence that the authors present are described in the paper.

Table of Contents:
Theoretical Issues
Empirical Evidence

From the Paper:

"If growth is concentrated in highly industrialized and central regions, and does not encompass the underdeveloped parts of the region, then growth will avoid the poor and will even further deepen the income inequality. Furthermore, in this sort of situations, the poor will be even more disadvantaged, as their products resulting from working the land will be unable to compete with the products manufactured in the industrialized centers - This is a true statement and can easily be supported by basic economics notions. Say for instance that the central region of a large city is subjected to increased industrialization and major investments from foreign partners. This will increase the value of that particular region, will capture the interest of other investors and will increase the living standards of the workers and the population located in the vicinity of the new business venture. However, the marginal regions of the city, where the poorer population lives and works will remain unaffected by the central developments. The situation will as such generate relative poverty and will even further increase the income inequality."

Sample of Sources Used:

• Bhagwati, J., Srinivasan, T.N., Trade and Poverty in the Poor Countries

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