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Recent Trade Liberalization in the Developing World: What is Behind It, and Where is it Headed?


  • John Whalley


This paper documents recent external sector liberalization in developing countries, evaluates what is behind it, and assesses whether it is likely to persist, accelerate or reverse itself. It draws heavily upon material collected during a recent Ford Foundation-supported research project on developing countries and the global trading system (see Whalley (1989)) covering eleven developing countries (Argentina, Brazil, China, Costa Rica, India, Kenya, Mexico, Nigeria, The Philippines, Republic of Korea and Tanzania). Many factors underlie these liberalizations. These include rethinking of the basic approach towards trade policy in a number of countries, with less commitment than earlier to import substitution and more interest in outward-oriented development strategies. Conditionality in World Bank and IMF lending programs appears important in Africa, and in some of the Asian and Latin American countries. In some cases, sector-specific liberalization has also been the result of bilateral pressure from the U.S. and the European Community. Recent strong macro performance in the developed world has also generated substantial growth in foreign exchange earnings for developing countries, and facilitated this liberalization. The paper concludes by suggesting that, in the short to medium term, some reciprocal actions by the developed countries in the GATT Uruguay Round would help in keeping domestic political support for these liberalizations alive.

Suggested Citation

  • John Whalley, 1989. "Recent Trade Liberalization in the Developing World: What is Behind It, and Where is it Headed?," NBER Working Papers 3057, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3057
    Note: ITI IFM

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    References listed on IDEAS

    1. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    2. N/A, 1985. "Asia," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 80-87, January.
    3. Laird, Sam & Nogues, Julio, 1988. "Trade policies and the debt crisis," Policy Research Working Paper Series 99, The World Bank.
    4. J. Clark Leith, 1974. "Foreign Trade Regimes and Economic Development: Ghana," NBER Books, National Bureau of Economic Research, Inc, number leit74-1, June.
    5. Bhagwati, Jagdish N, 1988. "Export-Promoting Trade Strategy: Issues and Evidence," World Bank Research Observer, World Bank Group, vol. 3(1), pages 27-57, January.
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    Cited by:

    1. Dani Rodrik, 1992. "The Limits of Trade Policy Reform in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 87-105, Winter.
    2. J. Kol, 1995. "Extent and evaluation of protection in developing countries," Open Economies Review, Springer, vol. 6(1), pages 81-104, January.
    3. Shah, Anwar & Whalley, John, 1990. "An alternative view of tax incidence analysis for developing countries," Policy Research Working Paper Series 462, The World Bank.
    4. Dani Rodrik, 1992. "The Rush to Free Trade in the Developing World: Why So Late? Why Now? Will it Last?," NBER Working Papers 3947, National Bureau of Economic Research, Inc.
    5. Rudiger Dornbusch, 1992. "The Case for Trade Liberalization in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 69-85, Winter.

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