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Estimating the Constraints to Trade of Developing Countries


  • Jean-Jacques Hallaert


  • Ricardo Cavazos Cepeda


  • Gimin Kang



The severity of binding constraints to trade expansion in developing countries and the importance of the complementary policies that will maximize the impact of trade reforms on trade and economic growth are identified and quantified in this report. As trade-related needs of developing countries are numerous, such quantification is needed to identify the most binding constraints to guide the sequencing of reforms and aid-for-trade interventions. The constraints to trade expansion are largely country specific. However, countries which share important characteristics may face similar binding constraints. An econometric analysis is undertaken for as many partner countries as possible to produce an �\unrestricted sample. that can be used as a benchmark against which special country groupings can be assessed. The econometric work relies on experimentation to identify and rank (based on their relative severity) the most binding constraints for each country grouping. Two case studies, on Azerbaijan and Uganda, illustrate the mechanisms of the econometric work and the importance of several variables not captured because of data limitations

Suggested Citation

  • Jean-Jacques Hallaert & Ricardo Cavazos Cepeda & Gimin Kang, 2011. "Estimating the Constraints to Trade of Developing Countries," OECD Trade Policy Papers 116, OECD Publishing.
  • Handle: RePEc:oec:traaab:116-en

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    References listed on IDEAS

    1. Keiko Ito & Kyoji Fukao, 2005. "The Vertical Division of Labor and Japanese Outward FDI: Impacts on Human Capital Deepening in Japan (in Japanese)," Hi-Stat Discussion Paper Series d05-115, Institute of Economic Research, Hitotsubashi University.
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    1. Trade constraints of developing countries
      by Economic Logician in Economic Logic on 2011-07-26 19:14:00


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    Cited by:

    1. Bhisma K. Bhusal & James R. Wilson & Susana Franco, 2014. "Rethinking Policy Intervention for the Transition towards Competitive Trade-Led Green Growth," Working Papers 2014R02, Orkestra - Basque Institute of Competitiveness.
    2. Borchert, Ingo & Gootiiz, Batshur & Grover, Arti & Mattoo, Aaditya, 2012. "Landlocked or policy locked ? how services trade protection deepens economic isolation," Policy Research Working Paper Series 5942, The World Bank.

    More about this item


    aid for trade; binding constraints; developing countries trade; landlocked countries; resource rich countries; small and vulnerable economies; taxonomy of constraints; trade expansion;

    JEL classification:

    • F1 - International Economics - - Trade

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