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The political economy of trade liberalization in developing countries

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  • Mustapha Nabli

Abstract

The paper addresses the issue of trade liberalization in developing countries from a political economy perspective using the theory of collective action. The role of collective action and interest group behavior is analysed critically both with respect to the initiation of attemps at liberalization and its outcome in terms of success or failure. A probit model is then used to test empirically the various hypotheses as to the determinants of likelihood of success of liberalization attempts. A sample of 51 liberalization episodes relating to 24 countries and spanning the period 1950–80 is used. Five factors are found to be critical in the process of liberalization: the strength of exporters groups as represented by the diversification and importance of manufactures and traditional exports, the strength of import-competing sector's opposition as measured by the share of manufacturing in GDP, the time elapsed since the beginning of import substitution, the size of country and the leadership committment and role. Copyright Kluwer Academic Publishers 1990

Suggested Citation

  • Mustapha Nabli, 1990. "The political economy of trade liberalization in developing countries," Open Economies Review, Springer, vol. 1(2), pages 111-145, June.
  • Handle: RePEc:kap:openec:v:1:y:1990:i:2:p:111-145
    DOI: 10.1007/BF01886162
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    References listed on IDEAS

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    1. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May.
    2. Kuran, Timur, 1988. "The tenacious past: Theories of personal and collective conservatism," Journal of Economic Behavior & Organization, Elsevier, vol. 10(2), pages 143-171, September.
    3. Baldwin, Robert E., 1984. "Trade policies in developed countries," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 12, pages 571-619 Elsevier.
    4. Pincus, J J, 1975. "Pressure Groups and the Pattern of Tariffs," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 757-778, August.
    5. Lal, Deepak, 1987. "The Political Economy of Economic Liberalization," World Bank Economic Review, World Bank Group, vol. 1(2), pages 273-299, January.
    6. McKinnon, Ronald I., 1982. "The order of economic liberalization: Lessons from Chile and Argentina," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 17(1), pages 159-186, January.
    7. Dee, Philippa S., 1984. "Economic policy making and the role of special interest groups: Some evidence for South Korea," Kiel Working Papers 217, Kiel Institute for the World Economy (IfW).
    8. Berg, Andrew & Sachs, Jeffrey, 1988. "The debt crisis structural explanations of country performance," Journal of Development Economics, Elsevier, vol. 29(3), pages 271-306, November.
    9. Albert O. Hirschman, 1968. "The Political Economy of Import-Substituting Industrialization in Latin America," The Quarterly Journal of Economics, Oxford University Press, vol. 82(1), pages 1-32.
    10. Jeffrey D. Sachs, 1987. "Trade and Exchange Rate Policies in Growth-Oriented Adjustment Programs," NBER Working Papers 2226, National Bureau of Economic Research, Inc.
    11. Sebastian Edwards, 1989. "Openness, Outward Orientation, Trade Liberalization and Economic Performance in Developing Countries," NBER Working Papers 2908, National Bureau of Economic Research, Inc.
    12. Quibria, M G, 1989. " Neoclassical Political Economy: An Application to Trade Policies," Journal of Economic Surveys, Wiley Blackwell, vol. 3(2), pages 107-136.
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    Cited by:

    1. Liu, Meng-chun, 2002. "Determinants of Taiwan's Trade Liberalization: The Case of a Newly Industrialized Country," World Development, Elsevier, vol. 30(6), pages 975-989, June.

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