Free Trade in Agriculture and Global Poverty Maurizio Bussolo, Rafael De Hoyos and Denis Medvedev Development Prospects Group, The World Bank, Washington, DC 1. INTRODUCTION I N most cases, trade liberalisation is welfare increasing, but it also brings about large income redistribution. While the empirical literature generally finds the aggregate gains to be small – on the order of a few percentage points of initial GDP – ‘the [static] efficiency consequences of trade reform pale in comparison with its redistributive effects’ (Rodrik, 1998). These effects often create complicated policy challenges both at the domestic and at the inter- national levels because, in most cases, losers tend to be a smaller and more vocal group than winners. 1 The recent collapse of the Doha Round is an exam- ple of such tensions, with disputes over the reduction of agricultural distortions stalling the progress of the entire negotiations. Resolving the current impasse could not only imply a solution to the distri- butional tension between countries – reconciling the demands of developing and agriculture exporting countries on one side and (mainly) high-income coun- tries with large domestic support on the other – but also narrow income dispari- ties within countries by reducing or eliminating the urban bias in the protection The authors are grateful to Kym Anderson, Hans Timmer, Ernesto Valenzuela, Dominique van der Mensbrugghe, participants of the 2007 ‘Agricultural Price Distortions, Inequality and Poverty’ con- ference at the World Bank, 2007 LACEA conference at the Universidad de los Andes, and 2008 GTAP conference in Helsinki for helpful comments and suggestions. All remaining errors are ours. The findings, interpretations and conclusions expressed in this paper are entirely those of the authors. They do not necessarily reflect the view of the World Bank, its executive directors, or the countries they represent. 1 According to Anderson and Martin (2005), self-interested vocal groups lobbying hard for exclud- ing agricultural liberalisation from multilateral negotiations include ‘not just farmers in the highly protecting countries and net food importing developing countries but also those food exporters receiving preferential access to those markets including holders of tariff rate quotas, members of regional trading agreements and parties to non-reciprocal preference agreements including all least- developed countries’. The World Economy (2011) doi: 10.1111/j.1467-9701.2011.01405.x Ó 2011 Blackwell Publishing Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. 2019 The World Economy