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Recent Theories of Imperfect Competition and International Trade: Any Implications for Development Strategy?

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  • T. N. Srinivasan

    (Yale University)

Abstract

Application of some new results in industrial organisation to trade theory have provided a better explanation of some stylized facts by being able to recognise features such as increasing returns to scale and non-competitive market structure. Another kind of such applications have generated results favoring an active role for government intervention under certain situations. A third line of research tends to find support for the view that the optimality propositions of the neoclassical theory associated with free trade are invalid for developing countries. The purpose of this paper is to examine the new theory in relation to policies of trade liberalisation that many developing countries have recently initiated. It will be argued that the case for liberalisation is by no means weakened by the new theory.

Suggested Citation

  • T. N. Srinivasan, 1989. "Recent Theories of Imperfect Competition and International Trade: Any Implications for Development Strategy?," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 24(1), pages 1-23, July.
  • Handle: RePEc:dse:indecr:v:24:y:1989:i:1:p:1-23
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    Cited by:

    1. Corden, W. Max, 1990. "Strategic trade policy : how new? how sensible?," Policy Research Working Paper Series 396, The World Bank.
    2. Bhattacharjea, Aditya, 1995. "Strategic tariffs and endogenous market structures: Trade and industrial policies under imperfect competition," Journal of Development Economics, Elsevier, vol. 47(2), pages 287-312, August.
    3. Deepak Lal, 1993. "Does Openness Matter? How to Appraise the Evidence," UCLA Economics Working Papers 690, UCLA Department of Economics.
    4. Dani Rodrik, 1993. "Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence," NBER Working Papers 4417, National Bureau of Economic Research, Inc.
    5. Corbo, Vittorio & Fischer, Stanley, 1991. "Adjustment programs and Bank support : rationale and main results," Policy Research Working Paper Series 582, The World Bank.

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