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Trade Policy, Openness, Institutions

Author

Listed:
  • Dawood Mamoon

    (Institute of Social Studies (ISS), The Hague. The Netherlands.)

  • S. Mansoob Murshed

    (Institute of Social Studies (ISS), The Hague. The Netherlands.)

Abstract

This paper examines the importance of institutions vis-à-vis openness and trade policies in determining per capita income differences across countries. Recent literature has tried to demonstrate that more open economies grow faster. On the other hand, it has also been asserted that it is not openness per se but institutions and good governance that matter in promoting growth. This paper attempts to test this hypothesis across a crosssection of nations. Unlike other papers in the field, we have tested not only for the degree of openness but also for trade policy indicators, as well as a fuller set of six institutional variables. Our broad finding is that although institutions matter, trade policies are also relevant to promoting growth, whereas openness per se has little impact on growth.

Suggested Citation

  • Dawood Mamoon & S. Mansoob Murshed, 2006. "Trade Policy, Openness, Institutions," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(1), pages 99-119.
  • Handle: RePEc:pid:journl:v:45:y:2006:i:1:p:99-119
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    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume1/99-119.pdf
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    References listed on IDEAS

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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    2. Shang-Jin Wei, 2000. "Natural openness and good government," Policy Research Working Paper Series 2411, The World Bank.
    3. Rose, Andrew K., 2004. "Do WTO members have more liberal trade policy?," Journal of International Economics, Elsevier, vol. 63(2), pages 209-235, July.
    4. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    5. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    6. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    7. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    8. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
    9. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
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    Cited by:

    1. Bakari, Sayef, 2016. "Impact of Exports and Imports on Economic Growth in Canada: Empirical Analysis Based on Causality," MPRA Paper 75910, University Library of Munich, Germany.
    2. Bakari, Sayef, 2017. "The Nexus between Export, Import, Domestic Investment and Economic Growth in Japan," MPRA Paper 76110, University Library of Munich, Germany.
    3. Muhammad Arshad Khan & Ayaz Ahmed, 2012. "Modelling Trade, Investment, Growth and Liberalisation: Case Study of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 187-208.

    More about this item

    Keywords

    International Integration; Economic Development;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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