ABSTRACT
Vietnam achieved remarkable outcomes in terms of the acceleration of economic growth and reduction in poverty since its transformation from a centrally planned to an open market economy. Many studies have argued that the miracle of economic growth in Vietnam is largely the outcome of its openness to trade (World Bank, 2005, 2012). Both concepts, trade policy and poverty, are multidimensional (Winters et al ., 2004), and the appropriateness of the measures of trade openness and poverty remains controversial (see Singh, 2010). A country-specifi c approach appears to be more appropriate to analyse the relationship between trade liberalisation and poverty. The literature shows several channels through which trade can affect households and poverty (see, for example, McCulloch et al ., 2001; Winters, 2002; Berg and Krueger, 2003; Winters et al ., 2004; Harrison, 2007; Nissanke and Thorbecke, 2007; Bandara, 2011; Athukorala, 2010). Of these, the Winters outline provides an analytical framework that is useful for the analysis of the relationship between trade liberalisation and poverty. Most studies seem to provide only indirect and partial evidence about the trade-growth-poverty nexus. In addition to model-based analysis, some studies attempt to examine the impacts of trade liberalisation on poverty by analytically reviewing facts and analysing data. Heo and Nguyen (2009) provide evidence on the relationship between trade liberalisation and reduction in poverty by examining the effects of trade on economic growth, market, employment, and the government revenue in Vietnam. Reports on sectors such as agriculture and textile/garment manufacture provide different angles to the relationship. The report of the United Nations Environment Programme (2005) fi nds that the trade reform process leads to signifi cant changes in rice production and exports, which discernibly affect the reduction in poverty. Nadvi et al . (2004) fi nd the impacts on textile and garment labourers of the integration of Vietnamese garment and textile fi rms into global garment and textile value chains. Even with such indirect and partial evidence, these studies provide a wealth of information on different aspects, leading to a better understanding of the relationship.
