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Trade liberalization, industrialization and development; experience of recent decades

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  • Shafaeddin, Mehdi

Abstract

Reviewing the experience of developing countries in recent years as well as successful industrialization in developed countries in previous centuries, the author explains that trade liberalization is necessary for industrialization if: it is regarded as a part and parcel of a dynamic and flexible trade and industrial policies; undertaken in the right time, gradually and selectively. More importantly, trade policy is to be an ingredient of a comprehensive set of industrial and development policies and measures to enhance the capabilities of firms for establishing industries, making them efficient and upgrading them. By contrast, if it is undertaken, pre-maturely, rapidly and uniformly, i.e. across-the-board, as advocated by Neo-liberals and proponents of “Washington Consensus”, it will lead to de-industrialization and unemployment; it will lock the country in specialization in production and exports of primary commodities and at best natural resource-based products, and/or labour intensive stage of assembly operation. He further, discusses changes needed in WTO rules and practices of International Financial Institutions to make them “development friendly”.

Suggested Citation

  • Shafaeddin, Mehdi, 2010. "Trade liberalization, industrialization and development; experience of recent decades," MPRA Paper 26355, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:26355
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    File URL: https://mpra.ub.uni-muenchen.de/26355/1/MPRA_paper_26355.pdf
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    References listed on IDEAS

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    4. Yilmaz Akyuz, 2005. "The WTO Negotiations on Industrial Tariffs: What is at Stake for Developing Countries?," Working Papers 2005/8, Turkish Economic Association.
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    6. Mehdi SHAFAEDDIN, 1998. "How Did Developed Countries Industrialize? The History Of Trade And Industrial Policy: The Cases Of Great Britain And The Usa," UNCTAD Discussion Papers 139, United Nations Conference on Trade and Development.
    7. Jie Yang, 2008. "An Analysis of So-Called Export-led Growth," IMF Working Papers 08/220, International Monetary Fund.
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    Cited by:

    1. Marjan Petreski & Branimir Jovanovic & Igor Velickovski, 2017. "Tariff-Induced (De)industrialization: An Empirical Analysis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(3), pages 345-381, September.
    2. Branimir Jovanović & Marjan Petreski & Igor Velickovski, 2015. "Tariff-induced (de)industrialization in transition economies: A comparative analysis," wiiw Balkan Observatory Working Papers 116, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    Trade liberalization; development; experience of developing countries;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F1 - International Economics - - Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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