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Trade and Growth under Limited Liberalization

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Author Info

  • Marina Bakanova

    (Catholic University of Leuven, Belgium)

  • L�cio Vinhas de Souza

    ()
    (Erasmus University Rotterdam, and Free University of Brussels)

Abstract

This paper studies the connection between trade and growth in the context of a partial and inconsistent liberalization process in a specific Eastern European country in transition towards market economy, namely, the Republic of Belarus. The analysis of the country trade patterns during the USSR period and the years since independence revealed that unlike its close neighbors (the Baltic States and Poland) Belarus did not succeed in changing the commodity or the geographical structure of its trade. It is almost a good representation of reality to say that Belarus trades with Russia. The assessment of the rationale for the closer integration with Russia and the impact of this process on Belarus growth led us to the conclusion that the integration in the form of a non-exclusive Free Trade Area and within the framework of a wider set of international connections rather than the move towards a Customs Union (and a Union State) with Russia would be a more optimal policy for Belarus. This conclusion is supported by the results of country-specific growth regressions and of a counterfactual "free trade experiment" via a small CGE model. This paper is partially based on the work by the Authors for the World Bank Global Development Network (GDN) Research Project "Explaining Growth in the CIS Countries".

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-053/2.

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Date of creation: 04 Jun 2002
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Handle: RePEc:dgr:uvatin:20020053

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Related research

Keywords: CGE models; growth; transition economics; international trade; economic integration;

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References

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  1. Orlowski, Lucjan T., 1993. "Indirect transfers in trade among former Soviet Union Republics: Sources, patterns and policy responses in the post-Soviet period," Kiel Working Papers 556, Kiel Institute for the World Economy.
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Citations

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Cited by:
  1. Lúcio Vinhas de Souza, 2004. "A Wider Europe: Trade Relations Between an Enlarged EU and the Russian Federation," CASE Network Studies and Analyses 0279, CASE-Center for Social and Economic Research.
  2. Irina Tochitskaya & Lúcio Vinhas de Souza, 2009. "Trade relations between an enlarged EU and the Russian Federation, and its effects in Belarus," Economic Change and Restructuring, Springer, vol. 42(1), pages 1-24, May.
  3. Vinhas de Souza, Lúcio, 2011. "An Initial Estimation of the Economic Effects of the Creation of the EurAsEC Customs Union on Its Members," World Bank - Economic Premise, The World Bank, issue 47, pages 1-7, January.

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