The effects of Fair Trade when productivity differences matter
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DEGIT XVII Conference, 13 september 2012
University of Milan, Milan : [S.n.]
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SubjectDistributional Conflicts in a Globalizing World: Consequences for State-Market-Civil Society Arrangements
This paper uses a heterogeneous rms model to scrutinize the alleged aim of Fair Trade to help the most disadvantaged producers in developing countries. Incorpo- rating important aspects of Fair Trade in a two-good heterogeneous rm model we show that the more productive rms will join Fair Trade arrangements. Presum- ing that the least advantaged producers are those with lowest productivity, it thus appears that Fair Trade cannot live up to its expectations.
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