Trade Liberalization and Export Performance in Bolivia

One of the anticipated gains from the trade liberalization policies adopted by many Latin American countries in recent years is improved export performance. In this article, the arguments on which this expectation is based are reviewed and the impact of trade liberalization on Bolivian manufactured exports analysed. The conclusion is that improved export performance is largely the result of a more realistic and more stable real exchange rate after 1985, while the trade policy reforms have had little impact. Certain deficiencies of Bolivia's export performance, such as the increased emphasis on primary and semi-processed products, and the lack of diversification in terms of both products and markets, are also noted.     

The Economics and Politics of Agricultural Trade Liberalization

Fred Sanderson, (Ed.), Agricultural Protectionism in the Industrialized World.
Theodore Cohn, The International Politics of Agricultural Trade.     

Mexican Public Sector Food Policy Under Agricultural Trade Liberalization

Mexico has enjoyed one of the Third World's most successful food production systems, based on a complex pattern of public sector intervention. Since 1982, the public sector has withdrawn, in a remarkably Steadfast commitment to privatization, external stabilization, and trade liberalization. This article traces the key elements of that process, and their likely impacts on traditional political goals of food security progressive social policy in the countryside, and external sector dependence. The principal argument is that privatization and trade liberalization leave poor agriculturalists vulnerable, but undoubtebly offer fiscal gains to the state and benefits to urban consumers, especially in light of reduced subsidies.     

Trade Liberalization and the Fiscal Squeeze: Implications for Public Investment

This article examines the impact of trade liberalization on the level and structure of government expenditures across countries, with particular emphasis on low income countries. It develops the argument that the policies employed during trade liberalization have resulted in a fiscal squeeze as a result of declining tax revenues and rising interest expenditures. To surmount this fiscal hurdle, expenditures on physical capital, which have negligible political ramifications, have been reduced. Other more politically sensitive expenditures, such as spending on social capital, have been financed by incurring additional debt. However, additional debt has exerted upward pressure on interest payments, further exacerbating the fiscal situation. The statistical analysis carried out to examine the evidence uses panel data for eighty developing and industrialized countries over the period 1970–98 and employs a fixed–effects regression framework to account for country–specific characteristics. The results indicate that trade liberalization has indeed resulted in declining revenues and higher interest expenditures and that these factors have contributed to the observed decline in infrastructure spending.     

How China Navigated the Dilemma of Trade Liberalization and Government Revenues

Many economists believe that in the long run, the aggregate performance of open economies is better than that of closed ones, and that open policies contribute significantly to economic development. At the same time, many political scientists and policy makers fear that, in the short run, one of the steps towards openness — trade liberalization — may harm government revenues. However, in the 1990s, China successfully navigated the dilemma of trade liberalization and government revenues. In this period, China decreased tariff and non‐tariff barriers for WTO accession, but has achieved dramatically increased tariff revenues since 1999. This study explores how China implemented trade liberalization and simultaneously increased tariff revenues in the 1990s. It demonstrates that a series of institutional arrangements, including a reform of Criminal Law, rigorous anti‐smuggling activities and a de facto tax imposed on the export sector, successfully curbed smuggling activities through the processing trade, and made foreign‐invested manufacturing enterprises the major contributors to the stability of customs revenue. China's case shows that a prosperous, export‐oriented and foreign‐invested manufacturing sector could potentially provide a developing country with a source of customs revenue.     

The Geographic Effects of Trade Liberalization with Increasing Returns in Transportation

Abstract This paper develops a model of economic geography that examines how the distribution of economic activity may change as a country opens up to foreign trade. The distinctive features of the model are that transportation is costly between locations within a nation as well as between nations, and that these transportation costs are subject to increasing returns to scale. A result of the model is that trade liberalization may cause the population of a country to become more concentrated in a single megalopolis. The large megalopolis may reduce welfare due to congestion costs, which implies that liberalization may unexpectedly leave the country worse off.     

Trade Liberalization and Prudential Regulation: The International Framework for Financial Services

This article provides an overview of the issues involved in international efforts to open and restructure markets for financial services and to ensure adequate regulation and supervision of financial firms. It discusses the liberalization in the General Agreement on Trade in Services (GATS), the first global trade agreement to cover financial and other services, and the roles of various international fora in strengthening national regulatory and supervisory systems and enhancing cooperation and coordination between supervisors. The article emphasizes that measures to liberalize trade in financial services and measures to strengthen prudential regulation and supervision are complementary and mutually reinforcing.