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Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s–2000s

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  • Antoni Estevadeordal

    (Inter-American Development Bank)

  • Alan M. Taylor

    (University of California, Davis, NBER, and CEPR)

Abstract

According to the Washington Consensus, developing countries' growth would benefit from reductions in barriers to trade. However, the empirical basis for judging trade reforms is weak. Econometrics are mostly ad hoc, results are typically not judged against models, policies are poorly measured, and most studies are based on pre-1990 experience. We address these concerns by employing a model with capital and intermediate goods, compiling new disaggregated tariff measures, and employing treatment and control regression analysis with differences-in-differences. We find that a specific treatment, liberalizing tariffs on imported capital and intermediate goods, led to faster growth, consistent with the model. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Antoni Estevadeordal & Alan M. Taylor, 2013. "Is the Washington Consensus Dead? Growth, Openness, and the Great Liberalization, 1970s–2000s," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1669-1690, December.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:5:p:1669-1690
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    References listed on IDEAS

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    Keywords

    GATT; Uruguay Round; trade liberalization; growth; capital goods; intermediate goods; developing countries;

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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