The political economy of trade liberalisation: What lessons for reforms today?
"This paper provides an overview of trade policy reforms in developing countries, especially the acceleration of trade and foreign investment liberalisation since the early 1980s. Its accent is on political economy, drawing on country examples and comparisons to show how politics interacted with economic conditions and shaped the relative success or otherwise of reforms. The first section of the paper sets the scene by looking at the global climate for external liberalisation, including debates revolving around the Washington Consensus. Section 2 reviews the record of trade and FDI liberalisation across the developing world. Section 3 probes the political economy of trade policy reforms. It provides a classification of the main factors influencing policy reforms, and makes comparisons across countries and regions. Section 4 looks at 'multi-track' trade policy, i,e. trade policy conducted, often simultaneously, on unilateral, bilateral, regional and multilateral tracks. Section 5 sets out lessons for future liberalisation in developing countries."