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Trade liberalization and the transition to a market economy

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  • Havrylyshyn, Oleh
  • Tarr, David

Abstract

The focus of this paper is on the transition from a trade regime in a socialist economy to one based on a (more) liberal market economy. Thus, there is no need to detail the past and current nature of trade institutions, patterns and performance. However, the sorts of problems that a transition policy must address emanate from the initial conditions. This paper outlines the framework of trade policy, noting the role trade plays in development, the main elements of the policy package, and their relation to the overall economic policy picture. It summarizes the main conclusions from trade liberalization experiences worldwide, includes some discussion of their applicability to formerly-socialist economies, and discusses external constraints and opportunities presented by GATT and the Uruguay Round and relations with the EEC. The role of the government in a liberalized economy is also discussed. Finally, the paper concludes by presenting and analyzing the principal differences between Eastern European countries and others regarding trade liberalization, and discusses how the generally advised path toward trade liberalization would be altered in Eastern Europe.

Suggested Citation

  • Havrylyshyn, Oleh & Tarr, David, 1991. "Trade liberalization and the transition to a market economy," Policy Research Working Paper Series 700, The World Bank.
    • Handle: RePEc:wbk:wbrwps:700
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    References listed on IDEAS

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    Cited by:

    1. Erzan, Refik & Holmes, Christopher & Safadi, Raed, 1992. "How changes in the former CMEA area may affect international trade in manufactures," Policy Research Working Paper Series 973, The World Bank.
    2. Hinojosa-Ojeda, Raul & Robinson, Sherman & Tesche, Jean, 1992. "Hungary, Austria, and the European Community: A CGE Model of Economic Refrom and Integration," CUDARE Working Papers 198597, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. Nigel Harris & David Lockwood, 1997. "The war-making state and privatisation," Journal of Development Studies, Taylor & Francis Journals, vol. 33(5), pages 597-634.

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