Abstract
Participation in international trade provides a Variety of benefits to the developing countries. They may obtain gains through resource allocation according to comparative advantage; the exploitation of economies of scale and increased capacity utilization; improvements in technology; increases in domestic savings and foreign direct investment; and increased employment.
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Notes
B. Balassa, ‘The Newly-Industrializing Developing Countries after the Oil Crisis,’ Weltwirtschaftliches Archiv, CXVII (1981) pp. 142–94.
Essay 2 in Bela Balassa, The Newly Industrializing Countries in the World Economy (New York: Pergamon Press, 1981) pp. 29–81.
Alternative definitions of the newly-exporting countries are provided in O. Havrylyshyn and I. Alikhani, ‘Is There Cause for Export Optimism? An Inquiry into the Existence of a Second Generation of Successful Exporters,’ Weltwirtschaftliches Archiv, CXVIII (1982) pp. 651–63.
G. H. Hughes and D. M. G. Newbery, ‘Protection and Developing Countries’ Exports of Manufacturers,’ Economic Policy, I (1986) pp. 409–41. The former include countries with manufactured export growth rates in excess of average growth rates by the NICs during the 1970s; the latter include countries with populations in excess of 10 million and per capita incomes of at least $750 in 1983. Both of these definitions have the disadvantage of excluding India, whose manufactured exports exceed that of any newly-exporting country under the two definitions, and Pakistan that also surpassed the majority of the NECs.
This section draws on B. Balassa and Associates, Development Strategies in Semi-Industrial Countries (Baltimore, Md.: The Johns Hopkins University Press, 1982).
B. Balassa, ‘Policy Experiments in Chile, 1973–83’, in G. M. Walton (ed.), The National Economic Policies of Chile (Greenwich, Conn.: JAI Press, 1985) pp. 203–38.
Essay 8 in B. Balassa, Change and Challenge in the World Economy (London: Macmillan, 1985) pp. 157–84.
A. O. Krueger, Foreign Trade Regimes & Economic Development: Liberalization Attempts and Consequences (Cambridge, Mass.: Ballinger, 1978), p. 282.
G. Feder, ‘On Exports and Economic Growth,’ Journal of Development Economics XII (1983) pp. 59–73.
C. Michalopoulos, and K. Jay, ‘Growth of Exports and Income in the Developing World: A Neoclassical View,’ Discussion Paper No. 28, (Washington, DC: Agency for International Development, 1973).
B. Balassa, ‘Exports, Policy Choices, and Economic Growth in Developing Countries after the 1973 Oil Shock,’ Journal of Development Economics, XVIII (1985) pp. 23–35.
B. Balassa and Associates, The Structure of Protection in Developing Countries (Baltimore, Md.: The Johns Hopkins Press, 1971) p. 82.
A. O. Krueger, ‘Some Economic Costs of Exchange Control: The Turkish Case,’ Journal of Political Economy, LXXIV (1966) pp. 466–80.
J. de Melo, ‘Estimating the Cost of Protection: A General Equilibrium Approach,’ Quarterly Journal of Economics, XCII (1978) p. 217. The results are 11.0 percent and 15.8 percent, respectively, postulating an optimal export tax for coffee, which is subject to an international agreement.
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A. O. Krueger, Trade and Employment in Developing Countries. 3 Synthesis and Conclusions (Chicago: University of Chicago Press, 1983) Table 6.2.
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© 1989 Bela Balassa
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Balassa, B. (1989). The Importance of Trade for Developing Countries. In: New Directions in the World Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-10588-5_1
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