« Previous | Main | Next »

August 11, 2005

Is trade good for poor countries?

Robert Hunter-Wade writes in the Financial Times:

Even the World Bank estimates that removing rich countries’ barriers to developing country exports would generate only very small income gains for the latter... many would actually lose from rich country trade liberalisation in key sectors. The ending of the multi-fibre agreement early this year, for example, has hurt textile exporters across the developing world as super-efficient producers in China gobble up the market.

Wade goes on to suggest other higher priorities (including reform of the WTO's intellectual property rules and the international monetary system).

But why have poor countries sometimes struggled to benefit from trade liberalisation? This paper from Bolaky and Freund provides evidence for an answer that is obvious in retrospect: countries with rigid labor laws or other excessive red tape cannot seize opportunities. Their entrepreneurs have to struggle against bureaucratic obstacles to respond to changes in the price of imports and exports.

Comments (0) Delicious E-mail Facebook   

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d834515e9269e200d83552d6b669e2

Listed below are links to weblogs that reference Is trade good for poor countries?:

Comments

Post a comment

Comments are moderated, and will not appear on this weblog until the author has approved them.

Search

Our Sponsor


Private Sector Home | Public Policy Journal | Toolkits | Business Environment Snapshots | Business Planet
©2009 The World Bank Group, All Rights Reserved. Legal. Terms of Service.