Does Trade Liberalization Reduce Poverty in Mali? Evidence from ARDL Bounds Testing Approach

Abstract

This paper investigates the impact of trade liberalization on poverty reduction in Mali over the period 1986-2018. Like Magombeyi and Odhiambo (2017), we will use three measures of poverty (namely per capita consumption, infant mortality rate and life expectancy) to capture its multidimensional aspects. Using the ARDL bounds testing approach, the findings indicate that there is a negative relationship between trade liberalization and three proxies of poverty reduction in the long-run. However, it significantly only decreased per capita consumption. Yet, in the short-run, trade liberalization has a positive and significant effect on per capita consumption and life expectancy. In contrast, it has a negative and significant impact on the infant mortality rate. From these findings, it can be said that in Mali, the effect of trade liberalization on poverty reduction is not sensitive to poverty proxies but depends on complementary policies. Factors such as financial deepening, education, consumer price index institutional quality, and infrastructure development seem to influence the relationship between trade liberalization, and poverty reduction.