Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence

73 Pages Posted: 30 Nov 2000 Last revised: 29 Jul 2010

See all articles by Dani Rodrik

Dani Rodrik

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

Date Written: August 1993

Abstract

This paper reviews recent theory and evidence on trade and industrial policy reform in developing countries. First, the theoretical and empirical basis of the rationales for policy reform are discussed. Next, two sources of heterodoxy are identified and evaluated: (a) the East Asian experience with interventionist industrial policies; (b) recent models of imperfect competition. The survey then turns on strategic issues in reform, and discusses the theory of piecemeal reform, tax or tariff uniformity, credibility, political economy, and interactions with stabilization policy. The penultimate section reviews the available evidence on the consequences of recent policy reform.

Suggested Citation

Rodrik, Dani, Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence (August 1993). NBER Working Paper No. w4417. Available at SSRN: https://ssrn.com/abstract=252200

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