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Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence

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  • Dani Rodrik

Abstract

This paper reviews recent theory and evidence on trade and industrial policy reform in developing countries. First, the theoretical and empirical basis of the rationales for policy reform are discussed. Next, two sources of heterodoxy are identified and evaluated: (a) the East Asian experience with interventionist industrial policies; (b) recent models of imperfect competition. The survey then turns on strategic issues in reform, and discusses the theory of piecemeal reform, tax or tariff uniformity, credibility, political economy, and interactions with stabilization policy. The penultimate section reviews the available evidence on the consequences of recent policy reform.

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  • 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.
  • Handle: RePEc:nbr:nberwo:4417 Note: ITI
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    Cited by:

    1. Independent Evaluation Group, 2006. "Assessing World Bank Support for Trade, 1987-2004 : An IEG Evaluation," World Bank Publications, The World Bank, number 6966.
    2. Haider A. Khan, 2003. "Digital Transitions: The POLIS Theory and The NIEs," CIRJE F-Series CIRJE-F-231, CIRJE, Faculty of Economics, University of Tokyo.
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    4. Judith Dean, 1995. "From protectionism to free trade fever? Recent reforms in developing countries," Open Economies Review, Springer, vol. 6(4), pages 369-385, October.
    5. Brousseau, Eric & Garrouste, Pierre & Raynaud, Emmanuel, 2011. "Institutional changes: Alternative theories and consequences for institutional design," Journal of Economic Behavior & Organization, Elsevier, pages 3-19.
    6. Haider A. Khan, 2002. "Digital Development: Challenges and Prospects," CIRJE F-Series CIRJE-F-152, CIRJE, Faculty of Economics, University of Tokyo.
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    8. Alberto Chong & Luisa Zanforlin, 2001. "Technological adaptation, trade, and growth," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(4), pages 565-592, December.
    9. Yolanda Fernández Lommen, 2000. "Crecimiento económico y comercio exterior en China," Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales 00-11, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
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    13. Onur Koska, 2005. "Financial Liberalization Era in Turkey: Critique on Decree No.32," Macroeconomics 0506016, EconWPA.
    14. McCarthy, F. Desmond & Neary, J. Peter & Zanalda, Giovanni & DEC, 1994. "Measuring the effect of external shocks and the policy response to them : empirical methodology applied to the Philippines," Policy Research Working Paper Series 1271, The World Bank.
    15. Diaz-Bautista, Alejandro, 2002. "The role of telecommunications infrastructure and human capital: Mexico´s economic growth and convergence," ERSA conference papers ersa02p102, European Regional Science Association.
    16. César Calderón & Alberto Chong & Luisa Zanforlin, 2001. "On Non-Linearities Between Exports Of Manufactures And Economic Growth," Journal of Applied Economics, Universidad del CEMA, vol. 4, pages 279-311, November.
    17. Donald Hay, 2015. "Industrial Policy in Brazil: a Framework," Discussion Papers 0074, Instituto de Pesquisa Econômica Aplicada - IPEA.
    18. Jeffrey A. Frankel & David Romer, 1996. "Trade and Growth: An Empirical Investigation," NBER Working Papers 5476, National Bureau of Economic Research, Inc.
    19. Stephen L. Parente & Edward C. Prescott, 1991. "Technology Adoption and Growth," NBER Working Papers 3733, National Bureau of Economic Research, Inc.
    20. Feal-Zubimendi, Soledad, 2007. "Crecimiento Económico y Apertura Comercial: Análisis de la Influencia de los Canales
      [Trade Openness and Economic Growth: Analysis of the Channels of Influence]
      ," MPRA Paper 63343, University Library of Munich, Germany.

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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