Development Policies Beyond Export-led Growth

In recent years, developing countries in different regions of the world have been struggling to create an economic and social environment conducive to sustainable growth with a reduction of poverty. In the process, countries have introduced policy and institutional reforms aimed at restoring macroeconomic stability, improving overall economic efficiency and promoting opportunities for the poor. Progress has differed among countries, depending on the government objectives, the strategies followed, and the capacity of the governments to gather support and to carry through their policies. However, most countries have made substantial progress in the narrow area of stabilizing their economies and in opening their economies to foreign trade. A more stable macroeconomic situation and the resultant dismantling of protection reduced the anti-export bias of the trade regime, facilitating an expansion of export activities. In turn, for a given size of the trade balance deficit, export expansion led to a higher level of imports. The higher level and better quality of imports, in turn, have had positive effects on consumers’ welfare and on total factor productivity.