Overview

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Even as the forces of market liberalization and globalization sweep across the world, it seems the jury is still out on whether market reforms have benefited the poor. While we know that markets can be good for the poor by creating productive economic opportunities, little consensus exists on the actual impacts of past reforms on the poor. For example, in the case of the agriculture sector, the emerging consensus suggests that while reforms did improve market efficiency and price transmission, the supply response has been mixed. Interestingly, studies that directly examine the poverty impacts in terms of changes in producers' terms of trade and changes in price volatility, results point to negative or at best mixed outcomes associated with reform (Christiansen and Pontara, 2002; Dercon, 2001; Sahn, Dorosh and Younger, 1997; Peters, 1996; Kheralllah et al., 200; Bocar et al., 1999; Meerman, 1997).

The mixed success of reforms has fueled extensive debates in the past decade. It has underpinned a shift beyond the "getting the prices right" paradigm to an agenda that focuses on the institutional features required for a well-functioning market. In this chapter, we hope to take this discussion a step further and examine specifically the relationships between markets and the poor. The impetus for this chapter comes from a renewed interest in poverty reduction as the organizing mandate for country development strategies and a specific interest in examining how markets can be made more "pro-poor" (World Bank, 2000; DFID, 2000). We...