Agriculture Trade Openness and Poverty Reduction: A Cross-Country Analysis

This paper explores the effects of general and agricultural trade opennesson economic freedom and alongside with the quality of institutions, on income and poverty.Recent cross-country data for over 200 nations in global regions were used to estimateequations for income, poverty and economic freedom. Economic freedom appears to havepositive impacts on income levels, which together with good institutions reduce poverty. It isalso concluded that poverty is determined both directly and indirectly by institutions. Atypical finding of this paper is that, in general, economic freedom is associated with tradeopenness and with agriculture trade liberalization.