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Strategic Trade Policy: An Option for Developing Countries?

A Review of the Theory, Empirical Findings and a CGE-Evaluation for Venezuela


Leonor von Limburg

Do developing countries have anything to learn from the «Strategic Trade Policy» debate? What lessons can they derive out of controversial models leading to constrasting perspectives about the impact of trade upon growth? This book addresses such questions by offering a critical review of the main developments of trade theory, concentrating on the implications of imperfect competition and increasing returns to scale in the analysis of trade. It also discusses the trade-growth relationship in the light of endogenous growth theories and explores the existence of a case for developing countries engaging in trade promotion of knowledge generating sectors. An account of the experiences with different trade regimes of various East Asian and Latin American countries and CGE-simulations of the effects of targeted trade promotion policies in Venezuela complement the analysis.
Contents: New Trade Theory and Strategic Trade Policy – The Role of Trade in the Different Paradigms of Growth – The Ambiguous Empirical Evidence over the Trade and Growth Relationship – A Computable General Equilibrium Simulation of Targeted Trade Promotion in Venezuela.