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Globalization : a new role for developing countries in an integrating world

Author

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  • Shigeru Otsubo

Abstract

The author reviews trends and developments in world trade, investigating the elements involved in the accelerated integration of world trade rights in the past decade. He explores what conditions and policy initiatives make it easier for countries to benefit from global trade and capital flows, and concludes: (1) World trade relative to world income has grown more in the 1990s than in the 1970s or 1980s, mainly due to: (a) the desynchronization of business cycles in Japan, Europe and the United States; (b) the expanded role in world trade of developing countries; and (c) the transfer of purchasing power that supported heightened import demand among developing countries. (2) Measured as the ratio of trade to output, the trend toward global integration accelerated sharply in the mid-1980s. A wave of liberalization among low- and middle-income countries resulted in a shift from an inward-oriented development strategy to an outward-oriented one. (3) World trade will grow more than 6 percent a year (on average) in the coming decade, although prospects for trade integration differ by region. (4) Balanced integration--with export and import capacities expanding sustainably--can be achieved only through policies that encourage long-term productive investment in the export sector.

Suggested Citation

  • Shigeru Otsubo, 1996. "Globalization : a new role for developing countries in an integrating world," Policy Research Working Paper Series 1628, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1628
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    References listed on IDEAS

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    1. Takeuchi, Kenji, 1990. "Does Japanese direct foreign investment promote Japanese imports from developing countries?," Policy Research Working Paper Series 458, The World Bank.
    2. Boltho, Andrea & Dadush, Uri & Dong He & Shigeru Otsubo, 1994. "China's emergence : prospects, opportunities, and challenges," Policy Research Working Paper Series 1339, The World Bank.
    3. Sebastian Edwards, 1990. "The Sequencing of Economic Reform: Analytical Issues and Lessons from Latin American Experiences," The World Economy, Wiley Blackwell, vol. 13(1), pages 1-14, March.
    4. Fry, M.J., 1992. "Foreign Direct Investment in a Macroeconomic Framework: Finance, efficiency, Incentives and Distortions," Papers 92-17, University of Birmingham - International Financial Group.
    5. Julio Nogues & Sunil Gulati, 1994. "Economic Policies and Performance Under Alternative Trade Regimes: Latin America During the 1980s," The World Economy, Wiley Blackwell, vol. 17(4), pages 467-496, July.
    6. Fry, M.J., 1993. "Foreign Direct Investment in a Macroeconomic Framework: Some Further Findings," Papers 93-03, University of Birmingham - International Financial Group.
    7. Syrquin, Moshe & Chenery, Hollis, 1989. "Three decades of industrialization," MPRA Paper 32771, University Library of Munich, Germany.
    8. Bhattacharya, A. & Linn, J.F., 1988. "Trade And Industrial Policies In The Developing Countries Of East Asia," World Bank - Discussion Papers 27, World Bank.
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    Citations

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    Cited by:

    1. Yvonne J. Acheampong & James E. Epperson & Timothy A. Park & Lewell F. Gunter, 2004. "Profitability adjustment patterns in international food and consumer products industries," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 31-43.
    2. Turan Subasat, 2008. "What is Globalisation and What is Not?: A Political Economy Perspective," Working Papers 0801, Izmir University of Economics.
    3. Shigeru Otsubo*Masahiko Tsutsumi, 1996. "Is the"Japan Problem"real? How problems in Japan's financial sector could affect developing regions," Policy Research Working Paper Series 1682, The World Bank.

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