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

82 Pages Posted: 23 Apr 1999 Last revised: 5 May 2000

See all articles by Francisco Rodriguez

Francisco Rodriguez

Instituto de Estudios Superiores de Administración (IESA) - Public Policy Center

Dani Rodrik

Harvard University - Harvard Kennedy School (HKS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: April 1999

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.

Suggested Citation

Rodriguez, Francisco and Rodrik, Dani, Trade Policy and Economic Growth: a Skeptic's Guide to Cross-National Evidence (April 1999). NBER Working Paper No. w7081. Available at SSRN: https://ssrn.com/abstract=160672

Francisco Rodriguez

Instituto de Estudios Superiores de Administración (IESA) - Public Policy Center ( email )

San Bernardino 1010, Caracas
Venezuela
58-212-5521533 (Phone)
58-212-5554226 (Fax)

Dani Rodrik (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-9454 (Phone)
617-496-5747 (Fax)

HOME PAGE: http://www.ksg.harvard.edu/rodrik/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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