Trade Liberalization and Income Distribution in Côte D’Ivoire: A Simulation with a Dynamic General Equilibrium Model

The main objective of this paper is to assess the potential effects of the WTO agreements on income distribution and welfare in Côte d’Ivoire. For this purpose, a dynamic CGE model is used to analyze the impacts of three scenarios ranging from partial and complete unilateral trade liberalization to multilateral application of tariff cuts according to the Uruguay round as discussed within the Doha agenda. The simulation results indicate that a partial or complete unilateral liberalization would induce a decrease in GDP, household income and household welfare compared to the baseline. Conversely, multilateral trade liberalization should positively affect economic growth, income, consumption and well being for almost all the household categories. However, our results indicate that the liberalization of foreign trade will not significantly alter the structure of income distribution. Changes in the Gini index remain insignificant for all scenarios.