The role of governance, trade openness, and competitiveness on poverty alleviation

• Main Authors: De Jesus, Eliz Rae A., Ma, Sabina Allen C., Sekito, Rina Ethel P.
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Poverty—Prevention; Public administration; Trade regulation; Competition; Economics
• Online Access: https://animorepository.dlsu.edu.ph/etdb_econ/33; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1036&context=etdb_econ
• Institution: De La Salle University

Poverty is a prevailing problem experienced by many on a global scale, especially in developing countries. Past literature examined the relationships between trade openness, competitiveness, and few World Governance Indicators and found significant impacts of these on either the poverty headcount ratio or poverty gap. Thus, this paper examined the interaction effects between trade openness and competitiveness and between trade openness and all six World Governance Indicators on poverty alleviation in 51 developing countries, measured using both the poverty headcount ratio and poverty gap. The results show that on their own, competitiveness, voice and accountability, and political stability and absence of violence significantly and negatively affect the poverty headcount ratio, and competitiveness and voice and accountability significantly and negatively affect the poverty gap. However, trade openness combined with competitiveness, voice and accountability, and political stability and absence of violence reduce both poverty headcount ratio and gap, but control of corruption decreases trade openness’ ability to alleviate poverty. Policies to improve competitiveness, strengthen voice and accountability, and enforce political stability and absence of violence are strongly recommended to effectively implement trade policies.