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Trade liberalization, industrialization and development; experience of recent decades

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  • Shafaeddin, Mehdi

Abstract

Reviewing the experience of developing countries in recent years as well as successful industrialization in developed countries in previous centuries, the author explains that trade liberalization is necessary for industrialization if: it is regarded as a part and parcel of a dynamic and flexible trade and industrial policies; undertaken in the right time, gradually and selectively. More importantly, trade policy is to be an ingredient of a comprehensive set of industrial and development policies and measures to enhance the capabilities of firms for establishing industries, making them efficient and upgrading them. By contrast, if it is undertaken, pre-maturely, rapidly and uniformly, i.e. across-the-board, as advocated by Neo-liberals and proponents of “Washington Consensus”, it will lead to de-industrialization and unemployment; it will lock the country in specialization in production and exports of primary commodities and at best natural resource-based products, and/or labour intensive stage of assembly operation. He further, discusses changes needed in WTO rules and practices of International Financial Institutions to make them “development friendly”.

Suggested Citation

  • Shafaeddin, Mehdi, 2010. "Trade liberalization, industrialization and development; experience of recent decades," MPRA Paper 26355, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26355
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    References listed on IDEAS

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    3. John Bosco Nnyanzi & Susan Kavuma & John Sseruyange & Aisha Nanyiti, 2022. "The manufacturing output effects of infrastructure development, liberalization and governance: evidence from Sub-Saharan Africa," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 369-400, June.
    4. Stojčić, Nebojša & Vojinić, Perica & Aralica, Zoran, 2018. "Trade liberalization and export transformation in new EU member states," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 114-126.
    5. Branimir Jovanović & Marjan Petreski & Igor Velickovski, 2015. "Tariff-induced (de)industrialization in transition economies: A comparative analysis," wiiw Balkan Observatory Working Papers 116, The Vienna Institute for International Economic Studies, wiiw.
    6. Nartraphee Tancho & Thanaporn Sriyakul & Changjiang Tang, 2020. "Asymmetric Impacts of Macroeconomy on Environment Degradation in Thailand: A NARDL Approach," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(4), December.
    7. Smitha Francis, 2015. "INDIA’S MANUFACTURING SECTOR EXPORT PERFORMANCE DURING 1999-2013: A Focus on Missing Domestic Inter-Sectoral Linkages," Working Papers 182, Institute for Studies in Industrial Development (ISID).

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    More about this item

    Keywords

    Trade liberalization; development; experience of developing countries;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F1 - International Economics - - Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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