IDEAS home Printed from
   My bibliography  Save this paper

Trade policy and exchange rate issues in the former Soviet Union


  • Corden, W. Max


The author reviews possible trade and exchange rate policies of the former Soviet Union. Alternative exchange rate regimes, including a monetary union are considered. For Russia, a fixed but adjustable regime is most realistic. Frequent adjustment may be desirable, to prevent the use of trade restrictions to achieve balance of payments objectives. The author examines the need for transitional tariffs, including the argument for a temporary uniform tariff that is higher than the long-run revenue tariff. The temporary uniform tariff is designed to prevent temporary overshooting of the exchange rate. The case for a free trade area is strong because the republics of the former Soviet Union are so highly specialized, but there will be problems if price controls remain and differ among the republics. There could be a free trade area even if there is no monetary union. The author concludes that one approach to trade policy is to have no trade policy - to have completely free trade with convertibility for current account transactions. Some tariffs and export taxes may be justified, at least as second-best policies. If so, the author stresses that four principles be observed: 1) barriers to existing trade between the republics should not be set up; 2) all quantitative control measures should be avoided; 3) tariff and export tax structures should be very simple; and 4) trade policy should be transparent.

Suggested Citation

  • Corden, W. Max, 1992. "Trade policy and exchange rate issues in the former Soviet Union," Policy Research Working Paper Series 915, The World Bank.
  • Handle: RePEc:wbk:wbrwps:915

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lindauer, David L & Meesook, Oey Astra & Suebsaeng, Parita, 1988. "Government Wage Policy in Africa: Some Findings and Policy Issues," World Bank Research Observer, World Bank Group, vol. 3(1), pages 1-25, January.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Gács, János & Peck, Merton & Illarionov, Andrei & Havlik, Peter & Kuboniva, Masaaki & Panitch, Vladimir & Sutela, Pekka & Lányi, Kamilla & Bulantsev, Vsevolod & Goldberg, Linda & Tenorio, Rafael & De , 1995. "International Trade Issues of the Russian Federation," MPRA Paper 60426, University Library of Munich, Germany.
    2. Richard Pomfret, 2006. "Coordinating Aid for Regional Cooperation Projects: The Experience of Central Asia," The Institute for International Integration Studies Discussion Paper Series iiisdp163, IIIS.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:915. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.