Openness Can Be Good for Growth: The Role of Policy Complementarities

This paper studies how the effect of trade openness on economic growth may depend on complementary reforms that help a country take advantage of international competition. This issue is illustrated with a simple Harris-Todaro model where welfare gains after trade openness depend on the degree of lab...

Full description

Bibliographic Details
Main Authors:	Chang, Roberto, Kaltani, Linda, Loayza, Norman V.
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	International Economic Order F020 Trade Policy International Trade Organizations F130 Economic Growth of Open Economies F430 International Linkages to Development Role of International Organizations O190 Measurement of Economic Growth Aggregate Productivity Cross-Country Output Convergence O470
Online Access:	http://hdl.handle.net/10986/5507

id	okr-10986-5507
recordtype	oai_dc
spelling	okr-10986-55072021-04-23T14:02:22Z Openness Can Be Good for Growth: The Role of Policy Complementarities Chang, Roberto Kaltani, Linda Loayza, Norman V. International Economic Order F020 Trade Policy International Trade Organizations F130 Economic Growth of Open Economies F430 International Linkages to Development Role of International Organizations O190 Measurement of Economic Growth Aggregate Productivity Cross-Country Output Convergence O470 This paper studies how the effect of trade openness on economic growth may depend on complementary reforms that help a country take advantage of international competition. This issue is illustrated with a simple Harris-Todaro model where welfare gains after trade openness depend on the degree of labor market flexibility. The paper then presents cross-country, panel-data evidence on how the growth effect of openness may depend on a variety of structural characteristics. For this purpose, the empirical section uses a non-linear growth regression specification that interacts a proxy of trade openness with proxies of educational investment, financial depth, inflation stabilization, public infrastructure, governance, labor market flexibility, ease of firm entry, and ease of firm exit. The paper concludes that the growth effects of openness may be significantly improved if certain complementary reforms are undertaken. 2012-03-30T07:33:09Z 2012-03-30T07:33:09Z 2009 Journal Article Journal of Development Economics 03043878 http://hdl.handle.net/10986/5507 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	International Economic Order F020 Trade Policy International Trade Organizations F130 Economic Growth of Open Economies F430 International Linkages to Development Role of International Organizations O190 Measurement of Economic Growth Aggregate Productivity Cross-Country Output Convergence O470
spellingShingle	International Economic Order F020 Trade Policy International Trade Organizations F130 Economic Growth of Open Economies F430 International Linkages to Development Role of International Organizations O190 Measurement of Economic Growth Aggregate Productivity Cross-Country Output Convergence O470 Chang, Roberto Kaltani, Linda Loayza, Norman V. Openness Can Be Good for Growth: The Role of Policy Complementarities
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	This paper studies how the effect of trade openness on economic growth may depend on complementary reforms that help a country take advantage of international competition. This issue is illustrated with a simple Harris-Todaro model where welfare gains after trade openness depend on the degree of labor market flexibility. The paper then presents cross-country, panel-data evidence on how the growth effect of openness may depend on a variety of structural characteristics. For this purpose, the empirical section uses a non-linear growth regression specification that interacts a proxy of trade openness with proxies of educational investment, financial depth, inflation stabilization, public infrastructure, governance, labor market flexibility, ease of firm entry, and ease of firm exit. The paper concludes that the growth effects of openness may be significantly improved if certain complementary reforms are undertaken.
format	Journal Article
author	Chang, Roberto Kaltani, Linda Loayza, Norman V.
author_facet	Chang, Roberto Kaltani, Linda Loayza, Norman V.
author_sort	Chang, Roberto
title	Openness Can Be Good for Growth: The Role of Policy Complementarities
title_short	Openness Can Be Good for Growth: The Role of Policy Complementarities
title_full	Openness Can Be Good for Growth: The Role of Policy Complementarities
title_fullStr	Openness Can Be Good for Growth: The Role of Policy Complementarities
title_full_unstemmed	Openness Can Be Good for Growth: The Role of Policy Complementarities
title_sort	openness can be good for growth: the role of policy complementarities
publishDate	2012
url	http://hdl.handle.net/10986/5507
_version_	1764395299368861696

Openness Can Be Good for Growth: The Role of Policy Complementarities

Similar Items