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Trade and Growth under Limited Liberalization: The Case of Belarus

Tinbergen Institute 2002-053/2

33 Pages Posted: 11 Jul 2002  

Marina Bakanova

KU Leuven - Centre for Institutions and Economic Performance (LICOS)

Lucio Vinhas Vinhas de Souza

DG-ECFIN, European Commission; UNU-CRIS

Date Written: 2002

Abstract

This paper studies the connection between trade and growth in the context of a partial and inconsistent liberalization process in a specific Eastern European country in transition towards market economy, namely, the Republic of Belarus. The analysis of the country trade patterns during the USSR period and the years since independence revealed that unlike its close neighbors (the Baltic States and Poland) Belarus did not succeed in changing the commodity or the geographical structure of its trade. It is almost a good representation of reality to say that Belarus trades with Russia. The assessment of the rationale for the closer integration with Russia and the impact of this process on Belarus growth led us to the conclusion that the integration in the form of a non-exclusive Free Trade Area and within the framework of a wider set of international connections rather than the move towards a Customs Union (and a Union State) with Russia would be a more optimal policy for Belarus. This conclusion is supported by the results of country-specific growth regressions and of a counterfactual "free trade experiment" via a small CGE model. This paper is partially based on the work by the Authors for the World Bank Global Development Network (GDN) Research Project "Explaining Growth in the CIS Countries".

Keywords: CGE models, growth, transition economics, international trade, economic integration

JEL Classification: F14, F15, F17, O47, P2

Suggested Citation

Bakanova, Marina and Vinhas de Souza, Lucio Vinhas, Trade and Growth under Limited Liberalization: The Case of Belarus (2002). Tinbergen Institute 2002-053/2. Available at SSRN: https://ssrn.com/abstract=316339 or http://dx.doi.org/10.2139/ssrn.316339

Marina Bakanova

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

Lucio Vinhas Vinhas de Souza (Contact Author)

DG-ECFIN, European Commission ( email )

BU-1 05/190
Brussels, Bruxelles B-1049
Belgium

HOME PAGE: http://www.vinhasdesouza.eu

UNU-CRIS ( email )

Potterierei 72
Brugge, 8000
Belgium

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