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Expanding national policy space for development: Why the Multilateral Trading System must change


  • Robert Hamwey

    (Cen2eco: Centre for Economic & Ecological Studies)


With the increasing political and economic integration that accompanies globalisation, a growing number of international agreements now restrict the national ‘policy space’ of developed and developing countries alike. The paper demonstrates how developing countries’ national policy space is affected by agreements comprising the Multilateral Trading System (MTS) under the World Trade Organization (WTO). Focus is given to examining the narrowing range of policy options permissible under international trade and finance agreements, and the adverse effects this can have on countries in earlier stages of economic development. These effects are reviewed with the finding that the playing field resulting from international trade agreements, that have ostensibly equivalent rules for all contracting parties, may provide a much smaller policy space for developing than developed countries because of differences in initial conditions and national policy implementation capacities. It is argued that special and differential treatment (S&DT) for developing countries under the MTS needs to be enhanced and made more actionable and effective in order to provide developing countries with essential national policy space for development. Finally, general areas where improved S&DT is needed, and should be pursued by developing countries in the ongoing Doha Round of WTO negotiations, are summarised.

Suggested Citation

  • Robert Hamwey, 2005. "Expanding national policy space for development: Why the Multilateral Trading System must change," Development and Comp Systems 0511005, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpdc:0511005
    Note: Type of Document - pdf; pages: 30. The paper provides a conceptual overview of national 'policy space' as a sub-space of the universe of policy options available to a country in an ideal world without policy constraints. From such an examination, the paper illustrates how domestic ‘endogenous’ constraints and international ‘exogenous’ constraints may significantly restrict a country’s access to national policy space for development. Sources of endogenous and exogenous constraints are reviewed, and ways that international environmental, social and economic agreements can both reduce and extend national policy space are outlined.

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    References listed on IDEAS

    1. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," Working Paper Series rwp04-047, Harvard University, John F. Kennedy School of Government.
    2. Acemoglu, Daron & Robinson, James A., 2006. "Economic Backwardness in Political Perspective," American Political Science Review, Cambridge University Press, vol. 100(1), pages 115-131, February.
    3. Rodrik, Dani, 2005. "Growth Strategies," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 14, pages 967-1014, Elsevier.
    4. repec:rus:hseeco:121595 is not listed on IDEAS
    5. Buffie,Edward F., 2001. "Trade Policy in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521004268, March.
    6. Guido Tabellini, 2004. "The Role of the State in Economic Development," Levine's Bibliography 122247000000000720, UCLA Department of Economics.
    7. Dreher, Axel, 2002. "The development and implementation of IMF and World Bank conditionality," HWWA Discussion Papers 165, Hamburg Institute of International Economics (HWWA).
    8. Robert E. Baldwin, 2004. "Openness and Growth: What's the Empirical Relationship?," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 499-526, National Bureau of Economic Research, Inc.
    9. Guido Tabellini, 2004. "The Role of the State in Economic Development," CESifo Working Paper Series 1256, CESifo.
    10. Buffie,Edward F., 2001. "Trade Policy in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521782234, March.
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    Cited by:

    1. van der Ven Colette M. A., 2017. "Trade, Development and Industrial Policy in Africa: The Case for a Pragmatic Approach to Optimizing Policy Coherence Between Industrial Policy and the WTO Policy Space," The Law and Development Review, De Gruyter, vol. 10(1), pages 29-80, June.
    2. Mehdi Abbas, 2007. "Mondialisation, Organisation mondiale du commerce et rapports Nord-Sud : entre différenciation et espace politique pour le développement," Post-Print halshs-00263950, HAL.
    3. Mehdi Abbas, 2008. "Les rapports Nord-Sud à l'OMC. Entre différenciation et espace politique pour le développement," Post-Print halshs-00217467, HAL.

    More about this item


    trade; development; developing countries; global economic governance; WTO;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems


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