Globalization and Poverty in Senegal: A Worst Case Scenario?

Type Working Paper - LICOS Discussion Paper, No. 217
Title Globalization and Poverty in Senegal: A Worst Case Scenario?
Author(s)
Publication (Day/Month/Year) 2008
Page numbers 0-0
URL http://www.econstor.eu/bitstream/10419/74876/1/dp217.pdf
Abstract
There is no consensus about how globalization –trade and foreign investments-affects poverty reduction. Using household survey data, this study contributes to the empirical literature on globalization and poverty by analyzing the household-level implications of increased foreign investments and trade in the horticulture sector in Senegal. In many aspects this represents what many would consider a “worst-case scenario”. Stringent rich country standards are imposed on exports and the supply chain is controlled by a single multinational company with extreme levels of supply base consolidation, full vertical integration and complete exclusion of smallholder suppliers. We analyze and quantify income and poverty effects under these “worst-case conditions” and find significant positive welfare impacts through employment creation and labor market participation.

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