Exports, Outward-oriented Development, and Economic Growth

• Main Author: Bruce E. Moon
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Published: 1997
• Subjects: First Nations
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.630.7945; http://www.lehigh.edu/~bm05/research/Ood.pdf

The World Bank has urged poor nations to adopt development strategies which emphasize export expansion, dismissing the caution against excessive trade dependence voiced by political economists. In re-examining the Bank’s much-cited analyses which suggest that "outward-oriented " nations have experienced more rapid growth, this study uncovers three findings which challenge its apparent implications. First, nations characterized as following outward-oriented development do not trade notably more than those regarded as inward-oriented. Second, outward-oriented nations do not expand their trade at a rate strikingly different from other countries. Third, it is not apparent that export expansion is the principal source of the superior macro-economic performance of so-called “outward-oriented ” nations. These findings raise questions about what is meant by "outward-oriented development". Moreover, because the structural claims of political economists concerning the dangers of trade dependence cannot be easily refuted, the counsel that nations should focus development efforts on expanding exports needs to be very carefully circumscribed. 1Theorists have long debated the relative merits of development strategies which accord priority to expansion of the foreign sector in contrast to those which emphasize inward-oriented development (Bhagwati, 1986; Reidel, 1988). Among economists, the balance has swung in favor of acknowledging