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Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence

Francisco Rodríguez () and Dani Rodrik ()

No 7081, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to this question. We argue that methodological problems with the empirical strategies employed in this literature leave the results open to diverse interpretations. In many cases, the indicators of openness' used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance. In other cases, the methods used to ascertain the link between trade policy and growth have serious shortcomings. Papers that we review include Dollar (1992), Ben-David (1993), Sachs and Warner (1995), and Edwards (1998). We find little evidence that open trade policies--in the sense of lower tariff and non-tariff barriers to trade--are significantly associated with economic growth.

JEL-codes: O57 F13 (search for similar items in EconPapers)
Date: 1999-04
New Economics Papers: this item is included in nep-agr, nep-cdm, nep-dev, nep-ind, nep-pke and nep-pol
Note: ITI
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Published as Bernanke, Ben and Kenneth S. Rogoff (eds.) NBER Macroeconomics Annual 2000, Volume 15. Cambrodge, MA: The MIT Press, 2001.
Published as Francisco Rodríguez & Dani Rodrik, 2000. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER/Macroeconomics Annual, vol 15(1), pages 261-325.

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Related works:
Chapter: Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence (2001) Downloads
Working Paper: Trade Policy and Economic Growth: A Sceptic's Guide to the Cross-National Evidence (1999) Downloads
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