Import Liberalization and Industrial Performance: Theory and Evidence

Sanjaya Lall and Wolfram W. Latsch

Chapter 2 in The Technological Response to Import Liberalization in SubSaharan Africa, 1999, pp 26-56 from Palgrave Macmillan

Abstract: Abstract There appears to be at least implicit agreement among neoclassical development economists on certain propositions: free trade (at least as a benchmark ideal) optimizes global resource allocation; increased import competition leads to greater industrial efficiency, increases welfare in developing countries and allows specialization in accordance with natural comparative advantage; trade interventions are justifiable only under particular restrictive conditions, and even then are nearly always a second-best measure; and developing countries that pursue liberal trade policies industrialize faster and more efficiently than those that intervene in trade. According to this view, the role of government in promoting industrialization should be restricted to alleviating rather narrowly defined market failures. The concomitant and largely neoliberal policy prescription is that, where trade interventions exist, their rapid removal is likely to be the best policy. This is particularly the view of the Bretton Woods institutions, constituting what John Williamson has called the ‘Washington consensus’. The government, in this view, can at best act as a mild corrective force in enabling a natural and largely given development path.

Keywords: Free Trade; Comparative Advantage; Trade Policy; Market Failure; Trade Liberalization (search for similar items in EconPapers)
Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-14852-3_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349148523

DOI: 10.1007/978-1-349-14852-3_2

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().