Trade Liberalisation and Economic Growth, an Emperical Analysis
- April 9, 2021
- Posted by: RSIS
- Categories: Economics, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue III, March 2021 | ISSN 2454–6186
Helder Eduardo Pinto Afonso
Institute of Governance, Humanities and Social Science, the Pan African University
Abstract: The issues in the achievement of an economic performance are underpinned by the success of different actions that are employed by the nations and its regional groups. In line with this goal, different economic schemes are applied to address the needs of growth performance. Therefore, it is important to understand the different challenges that can affect economic performance of a country and the issues of trade liberalization. This research examines the influence of openness to trade and growth performance. Thus, in this scenario the paper looked at different papers that analyses countries trading policies and the various strategies under liberalisation plan and its effect on economic growth. The empirical findings from various studies indicated that trade openness canaffect negatively economic growth, although, it showed that having a strong manufactural sector and industry, may create a positive impact on growth.
Key words: Openness, trade liberalisation and economic growth
The issues on growth and trade liberalisation have been a matter of debate for a while now, it is not new at all. Mallick and Ranjan (2019) affirmed that it is “inconclusive and theoretically controversial”. Academicians and scholars from the past and the current century have been arguing whether openness to trade would create economic growth. Sachs and Warner have contributed
Significantly to the studies of the relationship of these variables (Semancíková et al., 2016). Although, there is a lack of conceptualization and theoretical framework that links how trade liberalisation or joining a regional economic group can be proportionate to economic growth. Intellectuals have considered the relevant problems associated with the measurement of openness to trade and economic growth, and to some degree, economists and some policymakers believe that trade protection does not help the country’s economic growth.
Nations decide whether to join a regional group and it reflects on the adoption of different ideologies that align with the interests of a country and its specific vision. However, to liberalise or to protect the economy always appears to be the reaction of any state (Rodrik, 2017). Thus, the research carried out a study aimed at analysing the implications or the extent to openness to trade affects an economy. While trade liberalisation has been one of the most used policy, few indicators can describe the relationship between trade and economic growth.