Liberalizing foreign trade in developing countries: the lessons of experience

The view that a liberal trade regime promotes economic growth and efficiency has won wide acceptance in recent years. Ignorance of the components of this process of transition and of its unfolding over time means that economists have little to say about the detailed design of policies to promote trade liberalization. A recent research study by the World Bank analyzed the course of liberalization for 36 episodes of reform in 19 countries. This report summarizes the detailed results of this study. It addresses such topics as: the initial condition most favorable to a lasting commitment to reform; strong, sudden reforms as against moderate, gradual programs; the sequencing of reforms; the role of exchange rates and macroeconomic policies; short-term effects of liberalization; and the implications for employment and for the distribution of income. -from Publisher