Can Southâ€“South Trade Agreements Reduce Development Deficits?
Swapan K. Bhattacharya and
Journal of South Asian Development, 2014, vol. 9, issue 3, 253-285
With the rise of India and other Southern engines of growth, the South Asian Association for Regional Cooperation (SAARC) and similar vehicles for Southâ€“South regional cooperation have gained in importance. Developing a stochastic frontier gravity model, this article investigates the presence of significant â€˜behind the borderâ€™ and â€˜beyond the borderâ€™ constraints and analyzes the potential synergy between trade and development goals in the context of SAARC. In particular, the article demonstrates: (a) a considerable potential for improvement of trade complementarities among SAARC members; (b) a long-run scope for gains from trade; (c) country-specific â€˜socio-politicalâ€“economicalâ€“institutionalâ€™ rigidities form â€˜behind the borderâ€™ constraints to trade; (d) that realization of trade potential would eliminate development deficits via growth dividends through trade and investment spillovers, exchange of skills and knowledge; and (e) since tariffs are not an important barrier in this region, emphasis should be placed on higher technology cooperation, and cooperation in areas of education, literacy, gender, institutions ensuring good governance, social capital and infrastructure, to help achieve the SAARC Development Goals (SDGs). The main policy insights are that the removal of â€˜behind the borderâ€™ barriers and policy coordination would reduce â€˜productivity lagsâ€™ and close the â€˜gapâ€™.
Keywords: Stochastic frontier gravity model; trade; inclusive growth and development; SAARC; FTA/PTA (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sae:soudev:v:9:y:2014:i:3:p:253-285
Access Statistics for this article
More articles in Journal of South Asian Development
Bibliographic data for series maintained by SAGE Publications ().